UnitedHealth profit explodes after ditching most of its Obamacare business

UnitedHealth Group, the largest US health insurer, reported better-than-expected quarterly profit and revenue, helped by strength in its Optum business.

The company also increased its forecast for 2016 adjusted net earnings to about $8.00 per share, from $7.80-$7.95.

UnitedHealth's net earnings attributable to shareholders rose to $1.97 billion, or $2.03 per share, in the third quarter ended Sept. 30, from $1.60 billion or $1.65 per share, a year earlier.

On an adjusted basis the health insurer earned $2.17 per share, beating average estimate of $2.08, this was a 23% increase for net earnings from the same quarter last year.

The company said its consolidated medical care ratio, or the amount it spends on medical claims compared with the insurance premiums that it brings in, decreased 60 basis points to 80.3 percent in the third quarter.

Total revenue rose to $46.29 billion from $41.49 billion, slightly above analysts' estimate of $46.09 billion.

The strong earnings comes two quarters after the firm announced it was rolling back most of its business in the Affordable Care Act, better known as Obamacare, exchanges starting next year.

Open enrollment for Obamacare's 2017 plan year begins November 1. UnitedHealth said it will remain in only "a handful of states" going forward. United was the first of three major insurers - including Aetna and Humana - to seriously roll back their Obamacare offerings this year.

The company said that the number of people it covers in the individual marketplace, which includes the Obamacare exchanges, decreased on a year-over-year basis.

Following the news, shares of UnitedHealth ticked up $1.87 a share to $136.00, a 1.36% increase.