UnitedHealth group Inc. (UNH), the bellwether of health insurance companies, has a strong presence in the sector and his among the top five companies in the industry. This Minneapolis-based company is well known for its diversified business profile providing an array of well-being services to people through all stages of life.

However, like many of its peers, UnitedHealth is facing the numerous challenges thrown by the Health Reform Act. But the company stands apart from its peers as it has focussed on growing the less regulated business that is the health services segment named as Optum. Optum is like a jewel in the crown for the company and is expected to make increasing contribution tothe group’s overall revenues going forward.   

The company is also expanding its presence on online exchanges, aggressively forming Accountable Care Organizations and expanding its business beyond national boundaries. These developments should bode well for the group’s earnings.     

UnitedHealth has a pretty good earnings track record with the company delivering positive earnings surprises in each of the last four quarters with an average surprise of 5.4%.

Currently, UnitedHealth has a Zacks Rank #2 (Buy), but that could definitely change following the company’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings Beat: UnitedHealth beat on fourth quarter earnings by five cents per share. Our consensus called for EPS of $1.50, and the company reported EPS of $1.55.

Revenues Beat: Revenues, also came in ahead of expectations. UnitedHealth posted revenues of $33.4 billion, compared to our consensus estimate of $33.0 billion.

Key Stats: The company reported fourth quarter medical care ratio of 79.8% down 140 basis points year-over-year, due to the impact of Affordable Care Act fees and improved premium yields, partially offset by business mix.

Revenues from the company’s health care segment came in at $30.4 billion up 5.6% year over year while the other segment – Optum posted revenue of $12.9 billion up 24% year over year.

The company’s membership in Public and Senior market segment increased to 11.8 million from 10.5 million last year.    

UnitedHealth provided guidance for 2015 – the company expects earnings in the range of $6.00 to $6.25 per share and revenues in the range of $140.5 billion to $141.5 billion. The Zacks Consensus Estimate currently stands at $6.17 per share.

Stock Price:  Shares are up (1.7%) in pre-market trading following the release.

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