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UnitedHealth Group Q2 earnings, revenues climb YOY

UnitedHealthGroup Inc. posted second-quarter earnings from operations of $3.20billion, up from $2.90 billion in the prior-year quarter.

Net earnings attributable to UnitedHealth Group commonshareholders for the quarter were $1.75 billion, or $1.81 per share, anincrease from $1.59 billion, or $1.64 per share, in the year-ago quarter.

Adjusted net earnings for the second quarter were $1.89billion, or $1.96 per share, up from $1.67 billion, or $1.73 per share, in theprior-year period.

The S&P Capital IQ consensus normalized EPS estimate forthe quarter was $1.89.

Total revenues increased to $46.49 billion in the secondquarter from $36.26 billion in the year-ago quarter. Premium revenues rose to$36.41 billion from $31.96 billion in the year-ago quarter.

By segment, UnitedHealthcare revenues rose 14% year overyear in the second quarter. However, earnings from operations dropped 4% yearover year in the second quarter. The business' operating margin decreased 90basis points year over year due to $200 million in Affordable CareAct-compliant individual product losses beyond projections and overall reservedevelopment.

UnitedHealth's health services business, Optum, postedrevenue growth of 52% year over year in the second quarter and above 20%earnings growth.

The consolidated medical care ratio increased 30 basispoints to 82.0% in the second quarter, and included more than 50 basis pointsor approximately $200 million of additional full-year losses from ACA-compliantindividual products.

UnitedHealth said it narrowed its outlook for 2016 GAAP netearnings to between $7.25 per share and $7.40 per share and adjusted netearnings to a range of $7.80 per share to $7.95 per share. The companypreviously expectedadjusted EPS of between $7.75 and $7.95 for 2016.

The S&P Capital IQ consensus normalized EPS estimate for2016 is $7.88.