UnitedHealth Group, the largest U.S. health insurer, reported better-than-expected quarterly revenue and profit, due to strength in its pharmacy benefit management business and an improved medical cost ratio.
The company, which sells employer-based insurance as well as Medicare and Medicaid, said net earnings attributable rose to $1.90 billion, or $1.96 per share, in the fourth quarter ended Dec. 31, from $1.22 billion or $1.26 per share, a year earlier.
Excluding items, the company earned $2.11 per share, ahead of analysts' average estimate of $2.07, according to Thomson Reuters I/B/E/S.
UnitedHealth's results land at a time when the Republican-led Congress, pushed by President-elect Donald Trump, is moving quickly to repeal the Affordable Care Act, popularly known as Obamacare.
The company has said it will pull out of the Obamacare individual exchanges as it was unable to make money on the plans, but the lack of details on a replacement is creating uncertainty for the entire industry.
Total revenue rose 9 percent to $47.52 billion, beating the average analyst estimate of $47.26 billion.
Revenue in the company's Optum business, which manages drug benefits and offers healthcare data analytics services, rose 1.2 percent to $22.17 billion in the fourth quarter.
UnitedHealth said its medical care ratio, or the percentage of premiums paid out for medical services, improved to 80.8 percent from 82.7 percent, a year earlier, partly due to reduced individual market pressure.
The company's shares, up 13.62 percent since Trump's election on Nov.8, were marginally up in premarket trading on Tuesday.
(Reporting by Ankur Banerjee in Bengaluru; Editing by Sriraj Kalluvila)