UnitedHealth tops profit forecast, finally hikes outlook

This July 12, 2019, photo shows the UnitedHealthcare headquarters in Minneapolis. UnitedHealth Group beat forecasts for its earnings in the third quarter, and the U.S.'s largest health insurance provider finally hiked its 2020 outlook after holding off while trying to sort out COVID-19s impact. (AP Photo/Jim Mone, File)
This July 12, 2019, photo shows the UnitedHealthcare headquarters in Minneapolis. UnitedHealth Group beat forecasts for its earnings in the third quarter, and the U.S.'s largest health insurance provider finally hiked its 2020 outlook after holding off while trying to sort out COVID-19s impact. (AP Photo/Jim Mone, File) (Copyright 2019 The Associated Press. All rights reserved)

UnitedHealth Group beat third-quarter earnings expectations and finally hiked its 2020 forecast after holding off while trying to gauge COVID-19’s impact.

But the nation's largest health insurance provider also is thinking conservatively about its 2021 growth prospects as the coronavirus continues to spread widely.

Health insurers have approached 2020 forecasts cautiously, even though many reaped huge profits in the first half as the pandemic kept people home and out of the health care system.

Both analysts and insurers have said they expected medical costs to rise in the second half of the year, as communities that had shut down opened back up and people felt more comfortable seeking elective surgeries.

UnitedHealth said Wednesday that both care patterns and prescription volumes approached normal levels in its recently completed quarter. The company now expects 2020 adjusted net earnings to range between $16.50 to $16.75 per share.

That compares to a forecast it first laid out late last year for earnings of between $16.25 and $16.55 per share. UnitedHealth usually raises its forecast a couple of times during the year.

The new range mostly exceeds the average forecast on Wall Street for earnings of $16.57 per share, according to FactSet.

But the range's middle point is only about 1% higher than the same spot in the previous forecast, and it implies fourth-quarter earnings that could fall short of expectations, SVB Leerink analyst Stephen V. Tanal said in a research note.