What happened
Shares of UnitedHealth Group (UNH 0.30%), the nation's largest private medical insurer, were up more than 6.6% as of 11 a.m. ET on Friday after the company reported second-quarter earnings. The healthcare stock is still down than 10% so far this year, thanks to the company saying in June that it was seeing increased costs due to a rise in nonessential surgeries. Many of those surgeries had been put off during the COVID-19 pandemic.
So what
UnitedHealth Group reported second-quarter revenue of $92.9 billion, up 16% year over year. While its medical care ratio, a metric of company costs, rose from 82.2% to 83.2%, earnings per share (EPS) climbed 8.9% over the same period last year, to $5.82.
UnitedHealthcare, the company's insurance segment, reported revenue of $70.2 billion, up 13% over the same period last year, thanks to a greater number of people served. The Optum health services segment grew even faster with revenue of $56.3 billion, up 25% year over year. While margins for Optum fell to 6.6%, compared to 7.3% in the same period last year, the segment increased revenue per customer by 33% and added more than 900,000 patients.
The company also boosted guidance, saying it expected yearly EPS of between $23.45 and $23.75, compared to an earlier estimate of between $23.23 and $23.75. Last year, the company reported annual EPS of $21.18.
Now what
With a market cap of around $417 billion, UnitedHealth Group is a huge company and it takes a lot for the stock to rise as much as it did Friday. The company is also known for offering a dependable dividend, which it has raised for 14 consecutive years, delivering a yield of around 1.56%, slightly below the S&P 500 average of 1.66%.
