I'm sure the folks at UnitedHealth Group
The company capped off the year with another quarter of sinking earnings, but everyone saw that coming. Earnings per share fell 15% after adjusting for the previously announced charges, bringing the adjusted net earnings for the year to $2.95. Compare that to the $3.95 to $4.00 per share that the company was predicting it would earn this time last year and you can see just how bad a year it was.
Revenue in the fourth quarter was actually up 9%, but unfortunately the company's costs rose even faster. The medical care ratio -- medical costs divided by premiums -- jumped to 80.8% in the fourth quarter from 79.9% last year. But that's still an improvement compared to earlier in the year when the medical ratio was increasing at alarming rates.
There was some good news for UnitedHealth in 2008: Things could have been a whole lot worse. Insurers have a large stash of investments in bonds and other interest-paying investments like mortgage-backed securities that could have caused a bad blow-up -- think AIG
For this year, UnitedHealth is looking for earnings of $2.90 to $3.15 -- essentially flat compared to last year. That doesn't seem so bad, considering that it's expecting to lose as many as 1.5 million members as the unemployment rate grows.
Like rivals Aetna, Cigna
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