UnitedHealth Group is projecting revenue growth to pick up a bit next year led by its Optum division for health care services, which includes a fast-growing network of medical clinics and surgery centers.
The Minnesota-based company provided its first financial outlook for 2020 during an investor conference Tuesday in New York.
Chief executive David Wichmann said the numbers show how UnitedHealth has diversified beyond the core health benefits business at company's UnitedHealthcare division, which is the nation's largest health insurer.
"UnitedHealth Group is a fundamentally different company than the commercial insurance company I joined 22 years ago," Wichmann said. "With more than 50% of earnings coming from Optum in 2020, it's a good time to reflect on the accelerating impact diversification has had on the capacities of UnitedHealth Group, now a broad-based health care company."
UnitedHealth Group now expects 2019 revenue of about $242 billion with adjusted net earnings of nearly $15 per share, which is at the higher end of the company's most recent earnings guidance, according to a statement issued Monday evening. Adjusted earnings exclude certain expenses related to acquisitions.
For 2020, the company forecasts revenue of $260 billion to $262 billion and adjusted net earnings of $16.25 to $16.55 per share. Analysts surveyed by Refinitiv were expecting revenue in a range of $255.6 billion to $266.7 billion, and earnings per share between $16.25 and $16.75.
Enrollment in UnitedHealthcare health plans is expected to grow to roughly 50 million people next year, led by gains in benefits for people covered by the government-sponsored Medicare and Medicaid health insurance programs. Enrollment is expected to hold roughly steady or decline a bit among companies that hire UnitedHealthcare to run employer-sponsored health plans.
In addition to a division for clinics and surgery centers, Optum runs a business called OptumInsight that provides IT and data consulting as well as a pharmaceutical benefits manager called OptumRx.
UnitedHealth shares were off $1.93 in late morning trading, to $277.73. Shares are up about 14% since the beginning of the year.
