UnitedHealth Group Inc. (NYSE:UNH) and Union Pacific Corporation (NYSE:UNP) announced their first quarter results today. Though the health insurer’s profits declined 14 percent, the railroad giant’s net income rose 11 percent in the same period.
UnitedHealth Group Inc. (NYSE:UNH)
The country’s largest provider of Medicare Advantage Plans earned $1.19 billion or $1.16 per share in the first quarter, down from $1.39 billion or $1.31 a share in the same period of 2012. The Q1 2013 earnings figure doesn’t include a part of the profits that went to the Brazilian health care provider Amil Participacoes S.A. (PINK:AMPIY). UnitedHealth Group Inc. (NYSE:UNH) is in the process of acquiring the Brazilian company for $4.9 billion. However, revenues were up 11 percent to $30.34 billion. Wall Street analysts were expecting $30.54 billion in revenues and $1.14 in earnings.
The health insurer said the biggest reason of earnings drop was accounting adjustment due to leftover insurance claims. UnitedHealth Group Inc. (NYSE:UNH) had a $280 million gain because the claims left over from the past few quarters were lower than expected. The company had booked a gain of $530 million in the same period last year. Lower gains indicate that the actual claims were close to the company’s projections.
UnitedHealth Group Inc. (NYSE:UNH) said enrollments increased 18 percent during the March 31 ended quarter to 42 million people. The company witnessed growth in many categories and gained about 4 million customers from the Amil deal. However, medical costs rose 13 percent during the quarter to $22.57 billion.
The company lowered its revenue projections for the full year to $122 billion from the previous estimate of $123-$124 billion. Analysts expect UnitedHealth Group Inc. (NYSE:UNH) to report full year earnings of $5.51 a share with $123.83 billion in revenues.
UnitedHealth Group Inc. (NYSE:UNH) shares were down 3.35 percent to $59.95. You can read the detailed quantitative valuation analysis of UnitedHealth Group Inc. (NYSE:UNH) here.
Union Pacific Corporation (NYSE:UNP)
Helped by higher pricing, the Omaha, Nebraska-based railroad giant earned a profit of $957 million, or $2.03 per share, up 11 percent from $863 million, or $1.79 per share in the first quarter of last year. Total revenues increased 3.5 percent to $5.29 billion. Analysts were expecting $5.21 billion in revenues and $1.96 per share in earnings. The company reported solid growth despite a decline in cargoes. Agricultural and coal shipments also fell during the quarter.
Revenues from chemicals jumped 14 percent, while revenues from coal were down 6 percent in the period. Analysts said that Union Pacific Corporation (NYSE:UNP) is the best positioned company in the U.S. railroad industry, and it is poised to deliver reliable, stable growth.
Union Pacific Corporation (NYSE:UNP) shares were up 4.67 percent to $143.33 at 1:17 PM EDT.
