Insurer Unitedhealth’s 1Q Profit Climbs 3%

UnitedHealth Group Inc.'s first-quarter net income rose 3 percent as enrollment and revenue gains countered an increase in operating costs, and the health insurer raised its 2012 earnings forecast.

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The Minnetonka, Minn., company said Thursday it earned $1.39 billion, or $1.31 per share, in the three months that ended March 31. That's up from $1.35 billion, or $1.22 per share, in the same quarter last year. Revenue grew 7 percent to $27.28 billion.

The performance topped Wall Street expectations. Analysts surveyed by FactSet forecast, on average, earnings of $1.16 per share on $27.01 billion in revenue.

UnitedHealth is the largest health insurer based on both revenue and enrollment and the first to report earnings every quarter.

Health insurance is UnitedHealth's biggest business, but it also operates segments that sell wellness programs and information services. UnitedHealth's Optum businesses provide services like health management and wellness programs, technology outsourcing and pharmacy benefits.

The company has touted Optum as an important source of future growth, and revenue from that segment climbed 8 percent to $7.3 billion in the first quarter.

The insurer also said enrollment for its UnitedHealthcare insurance business climbed 3 percent to 35.6 million people compared with the end of 2011.

Total operating costs also climbed as medical costs, or the amount UnitedHealth paid in claims, rose 6.5 percent to $19.94 billion.

UnitedHealth now expects 2012 earnings to range between $4.80 and $4.95 per share. That's up from a previous forecast for earnings between $4.60 and $4.80 per share.

Analysts forecast earnings of $4.83 per share.