UnitedHealth 2Q Profit Falls Less Than Expected

Minnetonka, MN (AHN) - Shares of UnitedHealth rose Tuesday after the company reported a 73 percent decline in second quarter earnings, a smaller drop than analysts had expected.

The healthcare provider had net income of $337 million or 27 cents a share, down from $1.23 billion or 89 cents a share in the second quarter a year ago.

Excluding one-time charges for legal settlements, the company said second quarter earnings were 67 cents a share. Analyst expectations were for 64 cents a share, according to FactSet Research.

Revenue was $20.27 billion, up 7 percent from $19 billion a year ago and better than analyst estimates of $20.04 billion.

UnitedHealth stock jumped 10 percent Tuesday on the earnings beat.

"The worst case didn't happen to managed care, and that was enough for people to jump back in," said analyst Les Funtleyder of Miller Tabak & Co., according to the Associated Press. "The assumption is the worst is over."

The company said it expects 2008 full-year earnings of $2.95 to $3.05 a share. They also plan to continue the stock repurchase plan of more than $3 billion in shares over the course of the year.