The 10-second takeaway
For the quarter ended June 30 (Q2), UnitedHealth Group met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded. GAAP earnings per share grew.
Gross margins grew, operating margins shrank, net margins dropped.
UnitedHealth Group reported revenue of $30.41 billion. The 13 analysts polled by S&P Capital IQ expected sales of $30.51 billion on the same basis. GAAP reported sales were 12% higher than the prior-year quarter's $27.27 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.40. The 21 earnings estimates compiled by S&P Capital IQ averaged $1.25 per share. GAAP EPS of $1.40 for Q2 were 10% higher than the prior-year quarter's $1.27 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 27.1%, 50 basis points better than the prior-year quarter. Operating margin was 7.9%, 30 basis points worse than the prior-year quarter. Net margin was 4.7%, 20 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $30.74 billion. On the bottom line, the average EPS estimate is $1.54.
Next year's average estimate for revenue is $122.86 billion. The average EPS estimate is $5.45.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 3,307 members out of 3,460 rating the stock outperform, and 153 members rating it underperform. Among 1,057 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,041 give UnitedHealth Group a green thumbs-up, and 16 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on UnitedHealth Group is buy, with an average price target of $70.52.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends UnitedHealth Group and recommends the following options:long January 2014 $40 calls on UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.