Oct 14 (Reuters) – UnitedHealth Group Inc mentioned it anticipated COVID-19 to have a smaller affect on its revenue subsequent yr as infections decline and extra individuals get vaccinated, sparking a rally within the shares of U.S. well being insurers.
The corporate, the most important U.S. well being insurer, on Thursday additionally put to relaxation considerations of an affect from the Delta variant in 2021 by elevating its revenue outlook.
A surge in infections in July and August attributable to the extra infectious variant had elevated hospital prices, however circumstances have declined since then.
Chief Monetary Officer John Rex mentioned present market estimates had been “starting to calibrate” the corporate’s 2022 outlook. Analysts anticipate UnitedHealth to submit adjusted earnings per share of $21.60, in response to Refinitiv information.
“Buyers had been ready to get that visibility into the corporate’s framework round 2022 and clearly the corporate supplied a assured preliminary outlook for subsequent yr,” Stephens analyst Scott Fidel mentioned.
Whereas not each well being insurer has had the identical momentum as UnitedHealth, its feedback bode properly for the remainder of the sector, he added.
UnitedHealth shares surged 6%, whereas rivals Humana Inc , Cigna Corp and Centene Corp had been between 2% and three% larger.
UnitedHealth mentioned it anticipated 2021 adjusted earnings per share between $18.65 and $18.90, in contrast with $18.30 to $18.80 beforehand. It maintained its forecast for a COVID-related hit at $1.80 per share.
The insurer mentioned the revenue outlook accounted for a doable surge in high-cost procedures that had been delayed through the Delta surge and had been slowly returning to regular ranges.
The postponement of the procedures helped it beat earnings expectations for the quarter ended Sept. 30.
The corporate reiterated its long-term earnings per share development outlook of 13% to 16%.
Reporting by Manojna Maddipatla in Bengaluru; Modifying by Sriraj Kalluvila and Aditya Soni