UnitedHealth shares sink as company trims annual profit forecast,

Investing.com -- UnitedHealth reported third-quarter earnings and revenue that exceeded analyst expectations, but shares fell nearly 10% after the company trimmed its annual profit outlook.

The health insurer posted Q3 earnings per share (EPS) of $7.15, topping the consensus estimate of $7.02. Revenue came in at $100.82 billion, also above the estimated $99.14 billion.

The UnitedHealthcare segment generated $74.9 billion in revenue, reflecting a 7.2% year-over-year increase, and exceeding the estimated $73.65 billion.

Meanwhile, Optum's revenue grew 13% year-over-year to $63.9 billion.

“Our continued growth, which positions us well for the coming years, is rooted in the innovative products and responsive service of our people that are embraced each day across the full range of health care participants,” said Andrew Witty, CEO of UnitedHealth Group (NYSE:UNH ).

The negative market reaction comes as the health conglomerate also reduced the higher end of its annual adjusted profit forecast by 25 cents to $27.75 per share. 

According to UnitedHealth's press release, the guidance includes absorbing an estimated $0.75 per share in business disruption costs from Change Healthcare (NASDAQ:CHNG ) services, an increase of approximately $0.10 per share from last quarter’s estimate.

Moreover, UNH reported a Q3 medical loss ratio (MLR) of 80 basis points (bps) higher than consensus estimates, while analysts expected 30 bps.

Commenting on the report, Jefferies analysts said the company "found a way to deliver EPS upside, but not a high-quality way."

Source: Investing.com