NEW YORK (AP) — UnitedHealth Group said Thursday its fourth-quarter profit rose 10 percent, trumping Wall Street expectations as a drop in health care use continued to help the insurer.
The Minnetonka, Minnesota, company said it earned $1.04 billion, or 94 cents per share, in the three months ended Dec. 31. That’s up from the $944 million, or 81 cents per share, a year ago. Revenue rose 10 percent to $24.03 billion from $21.78 billion.
Analyst polled by FactSet had forecast a profit of 84 cents per share on $23.74 billion in revenue.
UnitedHealth is the largest publicly traded health insurer based on total revenue and the second-largest based on enrollment, trailing only WellPoint. It is the first big health insurer to release its earnings every quarter, and many analysts and investors see it as a bellwether for the sector.
The company said its premium revenue grew 10 percent to $21.69 billion, and service revenue rose 15 percent to $1.57 billion.
Commercial enrollment edged up to 24.8 million from 24.7 million a year ago, the company said. That was primarily because of greater enrollment in commercial risk-based insurance.
The company also backed its 2011 forecasts of $3.50 to $3.70 per share in profit and $100 billion in revenue. Analysts expect net income of $3.72 per share and $99.9 billion in revenue on average.
Revenue at the prescription solutions unit increased 13 percent to $4.29 billion, and revenue from the OptumHealth Care Solutions health and wellness business rose 6 percent to $1.51 billion. Revenue from the Ingenix health and information service unit climbed 33 percent to $715 million.
UnitedHealth also said Thursday that it will sell part of Ingenix to privately held pharmaceutical support company inVentiv Health Inc. InVentiv Health is buying the i3 clinical development business, including the research, statprobe, and pharmaceutical resourcing units. UnitedHealth said those businesses bring in about $400 million in annual revenue. It did not disclose terms of the sale, which is expected to close in the first half of 2011.
With the U.S. economy recovering and health care use declining in 2010, UnitedHealth said its full-year profit grew 21 percent, to $4.63 billion, or $4.10 per share. Its revenue increased 8 percent to $94.16 billion.