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UnitedHealth's first-quarter profit soared 35 percent as the nation's biggest health insurer slashed participation in Affordable Care Act exchanges but grew just about every other part of its business.
The insurer also hiked its 2017 earnings forecast on Tuesday, and company shares started climbing shortly after it detailed quarterly results.
Enrollment in Medicare Advantage plans and the state- and federally funded Medicaid coverage both swelled for UnitedHealth, which also continued to grow an Optum segment that sells several services outside the company's core health insurance.
Operating earnings from that insurance businesses climbed 15 percent to $2.1 billion, even though UnitedHealth's individual enrollment plunged as it withdrew from nearly all the Affordable Care Act's health insurance exchanges.
The insurer pulls in most of its enrollment from group insurance coverage offered through employers.
UnitedHealth had warned last year that it expected to lose more than $800 million on individual coverage sold through the Affordable Care Act's exchanges, and the insurer scaled back its participation on those exchanges this year to three states after rapidly expanding to 34.
Several other major insurers like Aetna Inc. and Humana Inc. also have pared back their participation after booking deep losses on the exchanges, which face an uncertain future as Republicans in Congress mull another attempt at repealing and replacing the federal law.
UnitedHealth also saw operating earnings climb nearly 16 percent to $1.3 billion from its Optum segment. That business provides pharmacy benefits management and technology services and also operates clinics and doctor's offices.
Earlier this year, UnitedHealth stocked that segment with a $2.3 billion purchase of Surgical Care Affiliates, which runs surgery centers.
Overall, the company earned $2.17 billion in the first quarter on $48.72 billion in total revenue. Adjusted results came to $2.37 per share.
Analysts forecast earnings of $2.17 per share on $48.33 billion in revenue.
UnitedHealth now expects adjusted 2017 earnings of between $9.65 and $9.85 per share after predicting $9.30 to $9.60 per share last fall.
Analysts polled by FactSet expect earnings of $9.50 per share.
Shares of UnitedHealth, a component of the Dow Jones industrial average, climbed more than 2 percent, or $3.67 to $170.85 in premarket trading. The stock topped $172 earlier this year to reach a new all-time high.
UnitedHealth is the first health insurer to announce earnings every quarter, and many analysts and investors see it as a bellwether for other insurers.