UnitedHealth Group raised its 2019 forecast and detailed another better-than-expected quarter, lifting the company's share price by nearly 8.2% in trading Tuesday on the New York Stock Exchange.
CEO David Wichmann told analysts it would be "reasonable and prudent" for them to set initial expectations for core operating performance at the lower end of UnitedHealth's long-term goal of 13% to 16% growth annually.
That's slightly higher than average expectations on Wall Street, according to FactSet.
The nation's largest health insurance provider typically starts its annual forecasts conservatively and won't discuss expectations again until its annual investor conference in December. Even so, Wichmann's comments helped juice a sector of stocks that has lagged this year while broader indexes like the Dow Jones Industrial Average have climbed around 15%.
Shares of other health insurers and pharmacy benefit managers like Anthem Inc. and Cigna Corp. also jumped in Tuesday trading.
Those stocks have bounced around this year, as some Democratic presidential candidates have renewed a push for a "Medicare for All " plan that could replace private coverage and as Congressional committees investigated soaring drug costs .
UnitedHealth Group Inc. provides health insurance for more than 49 million people and also runs one of the nation's biggest pharmacy benefit management businesses through its Optum segment.
Overall UnitedHealth earnings jumped 11% in the quarter to $3.54 billion. Earnings, adjusted for one-time gains and costs, were $3.88 per share, which is 8 cents better than Wall Street was expecting, according to Zacks Investment Research.
Total revenue grew about 7% to $60.35 billion, also topping projections.
Pinnacle Bank ups net income by 19%
The parent company of Pinnacle Bank boosted its third quarter earnings by 19% over a year ago to $110 million as the Nashville-based bank boosted both earnings and deposits by double-digit levels in the past year.
Pinnacle Financial Partners, Inc. reported net income per diluted common share of $1.44 for the quarter ended Sept. 30, 2019, compared to $1.21 per share a year earlier. For the first nine months of the year, net income is up 16.4% to $3.97 per share.
The results exceeded Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $1.34 per share.
We are particularly pleased with our dramatic year-over-year fee growth as we have headed into what appears to be a volatile interest rate environment," Pinnacle CEO Terry Turner said. "We continue to produce top-quartile profitability and, more importantly, we continue our focus on earnings per share growth and tangible book value per share accretion, having produced 5-year compounded annual growth rates of 22.6 percent."
Pinnacle, which acquired the former CapitalBank & Trust in Chattanooga for $187 million in 2015, boosted its overall deposits to $20 billion as of Sept. 30 and the banks has hired 67 more officers or loan specialists so far this year.
JPMorgan Chase net income up 8%
JPMorgan's third-quarter profit grew 8% thanks to strong performance at its investment banking business.
Recent upticks in yields in the U.S. bond market have allowed banks to charge higher interest rates on their loans, particularly at JPMorgan with its large credit card business and home-lending operations. But the Federal Reserve's decisions to lower its benchmark interest rate this year has yet to have a significant impact on bank profits.
JPMorgan, the nation's largest bank by assets, said Tuesday that its consumer banking business reported a 5% rise in quarterly profits from a year ago. That was largely helped by more activity in its home lending business, as well as more people carrying a balance on their credit cards.
Profits at its investment bank rose 7%, driven the bank's trading desks, despite the typical slow summer months on Wall Street.
The bank as a whole earned $9.08 billion, or $2.68 per share, in the quarter ended Sept. 30, up from $8.38 billion, or $2.34 a share, in the same period a year earlier. The results beat analysts' expectations for a profit of $2.45 a share, according to FactSet.
Total revenue at the bank was $29.34 billion, up from $27.26 billion a year earlier.
Wells Fargo profits drop 23% in quarter
Wells Fargo's net income in the third quarter fell 23% to $4.61 billion, as the banking giant struggles to get past scandals over sales practices in its retail division.
The bank said Tuesday that its earnings fell to 92 cents per share from $1.13 per share a year ago.
The results missed the average Wall Street estimate of $1.15 per share, based on a survey of seven analysts by Zacks Investment Research. The latest results include a charge of 35 cents per share related to lawsuits over a scandal in its retail business that has dogged the bank for years. That was offset somewhat by a gain of 20 cents per share from the sale of a retirement trust business.
The bank's net interest income for the quarter declined about 8% to $11.6 billion, in part due to falling interest rates. Wells had $12.6 billion of interest income in the third quarter of 2018. The average rate on the 30-year, fixed-rate mortgage dipped to 3.57% last week from about 4.9% a year ago, according to mortgage buyer Freddie Mac.
J&J boosts profits 23% on higher sales
Johnson & Johnson's third-quarter profit jumped 23%, beating Wall Street forecasts, thanks to higher sales of its key medicines for cancer and immune disorders and an acquisition-related charge a year earlier.
The world's biggest maker of health care products also raised its financial forecast for the year.
The strong quarter came as the Band-Aid maker is fighting a deluge of lawsuits over alleged harm from its baby powder, opioid painkillers and schizophrenia drug Risperdal. On Oct. 8, a Philadelphia jury hit J&J with a stunning $8 billion punitive damages verdict in a case in which a young man grew breasts while taking Risperdal — a rare but known side effect.
During a conference call Tuesday to discuss the company's financial results, Chief Financial Officer Joseph Wolk told analysts that the $8 billion award, which J&J is appealing, "will come down based on (legal) precedent." He criticized plaintiffs' attorneys for extensive negative advertising ahead of trials in which plaintiffs have argued that the talc in Johnson's baby powder caused ovarian cancer or mesothelioma, resulting in some huge verdicts against J&J. Wolk said the company has been overturning lost talc cases on appeal, won three talc lawsuits last week alone and knows "how to navigate around these matters."
J&J reported net income of $4.83 billion, or $1.81 per share. That was up from $3.93 billion, or $1.44 per share, in 2018's third quarter, when the drugmaker took a $1.13 billion charge related to research programs acquired with its purchase of Alios BioPharma.