An early flu season sent more consumers to the doctor, but the company said it was able to managed costs.
Medical costs grew faster than revenue at UnitedHealth Group Inc., pulling down fourth-quarter net income by 1 percent at the nation's largest health insurance company.
The Minnetonka-based company said Thursday it earned $1.24 billion, or $1.20 a share, during the quarter ending Dec. 31. During the same period a year ago, UnitedHealth posted profits of $1.26 billion, or $1.17 a share. The results met the average of 19 analysts, according to Bloomberg.
Overall revenue rose 11 percent to $28.8 billion, while the cost of covering medical care for its enrollees climbed 12 percent to $20.8 billion. An early flu season played a role.
United maintained its full-year forecast for 2013 earnings of $5.25 to $5.50 per share, made on Nov. 26.
In a research report, Leerink Swann analyst Jason Gurda described it as "overall, a solid quarter with few surprises, but less impressive than the company's performance earlier in the year."
As the first insurer to report earnings every quarter, United is considered a indicator for the health care sector, particularly as health reform efforts roll out.
Shares were up less than 1 percent to $54.15 in early afternoon trading.
UnitedHealth continued to see enrollment in its benefits plans rise in both company-based plans as well as government-backed plans for seniors using its Medicare Advantage plans and low-income Americans covered by Medicaid.
Enrollment grew to 40.9 million, a boost of almost a fifth. About 4 million of the gains came from UnitedHealth's $4.9 billion acquisition of Brazil's top insurance company, Amil Participacoes, which also operates hospitals and clinics.
"We continued to gain market share and broadened our revenue and earnings growth sources," CEO Stephen Hemsley said in the statement.
Earnings for United's health services division, Optum, climbed 65 percent with higher-margin products and cost-reduction efforts.
Dave Shove of BMO capital markets called it a "solid quarter" and "right on the money" in a research note.
For the year, UnitedHealth posted revenue of $110.6 billion, with earnings of $5.53 billion, or $5.28 per share.
Jackie Crosby • 612-673-7335