NEW YORK - UnitedHealth Group Inc., the biggest U.S. health insurer, reported third-quarter sales below analysts’ expectations while declining to raise its profit projections, driving shares down the most in six months.
Net income rose less than 1 percent to $1.57 billion from a year earlier and the Minnetonka, Minn.-based insurer reported per-share earnings of $1.53, matching the average of 18 analysts’ estimates compiled by Bloomberg. Revenue climbed 12 percent to $30.6 billion, UnitedHealth said in a statement today. Analysts had estimated $30.9 billion, on average.
UnitedHealth exceeded analyst expectations in all but one quarter over the last four years, helped by rising enrollment and medical costs that have remained low since the recession ended in 2009. While both trends continued in the third quarter, the company also said profit suffered from a decline in government Medicare payments.
“There were a couple undesirable surprises,” wrote Carl McDonald, a New York-based Citigroup analyst, in a note to investors today. “The obvious one is that earnings were in-line with expectations, rather than the big beats we’ve generally become accustomed to.”
UnitedHealth fell 3.9 percent to $72.23 at 10:03 a.m. New York time, after declining 5.2 percent in the biggest intraday drop since April 18. The shares had gained 39 percent this year through yesterday.
The shares of competing U.S. health insurers also dropped, with Humana Inc., the second-biggest Medicare provider after UnitedHealth, decreasing 3.2 percent to $93.50. WellPoint Inc. fell 1.9 percent to $87.95.
UnitedHealth is the first publicly traded health insurer to release results this quarter. Indianapolis-based WellPoint, the second-biggest U.S. health insurer, is due to report on Oct. 23. Humana, based in Louisville, Ky., will release results on Nov. 6.