UnitedHealth Group (UNH), the largest U.S. health insurer, reported a better-than-expected quarterly profit due to strength in its pharmacy benefit management business, and technology and consulting divisions.
UnitedHealth also narrowed its adjusted full-year profit outlook to $7.80-$7.95 per share, from a prior range of $7.75-$7.95 per share.
Revenue from the company’s Optum business, which manages drug benefits and offers health care data analytics services, rose 51.5% to $20.6 billion for the quarter.
UnitedHealth which also sells employer-based insurance as well as Medicare, Medicaid, and Obamacare health plans, is the only large insurer not involved in one of the major consolidation deals under review by antitrust regulators.
In April, the company confirmed it would largely exit the Obamacare market in 2017, as it was expecting mounting losses from the program.
Losses from the Obamacare plans continued to weigh on UnitedHealth’s insurance business in the second quarter, bringing its operating margin down by 90 basis points from last year.
The company’s total medical care ratio, the percentage of premium an insurer spends on claims and improving health care quality, rose by 30 basis points to 82% on increased costs related to the Obamacare plans.
Net earnings attributable to company’s shareholders rose to $1.75 billion, or $1.81 per share, in the quarter ended June 30, from $1.59 billion, or $1.64 per share, a year earlier.
On an adjusted basis, the company earned $1.96 per share, well above the average analyst estimate of $1.89, according to Thomson Reuters I/B/E/S.
Total revenue rose about 28% to $46.49 billion. Analysts were expecting revenue of $45.04 billion.