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UnitedHealth Group posted stronger-than-expected earnings Tuesday in the first quarter without the bulk of its Affordable Care Act-compatible individual health-insurance business.
The insurance giant earned $2.37 a share, higher than the $2.17 expected by analysts. It also generated $48.7 billion in revenue, higher than the $48.3 billion that analysts were anticipating.
UnitedHealth also raised its guidance for both profit and revenue for the year. The insurer now sees full-year EPS of $9.65 to $9.85 a share, higher than the expected $9.51 a share.
This was the first quarter in which UnitedHealth rolled back most of its plans from the exchanges established by the ACA, the healthcare law better known as Obamacare. The company said the rollback slowed revenue growth and the number of lives covered.
“UnitedHealthcare’s withdrawal from ACA Individual markets, combined with the 2017 health insurance tax deferral, reduced consolidated first quarter 2017 revenues by approximately $1.6 billion and lowered the revenue growth rate by 4.1 percent,” the release from UnitedHealth said.
The company also said it dropped 765,000 people through the ACA market, partially offsetting the addition of 1.5 million customers through other lines of business.
Following the release, UnitedHealth’s stock was up 2.25% in premarket trading to $170.95 as of 6:35 a.m. ET.