UnitedHealth Profit Up on Higher Premiums NEW YORK (Reuters) - Health insurer UnitedHealth Group Inc. (UNH.N: Quote , Profile , Research ) on Thursday posted a 41 percent rise in first-quarter earnings, topping expectations, on higher premiums and cost-cutting, and it raised its full-year forecast. Net income for the first quarter rose to $779 million, or $1.16 per share, from $554 million, or 88 cents per share, a year earlier. Analysts had on average expected the company to earn $1.13 a share, according to Reuters Estimates. "We believe that this bodes very well for the managed care industry overall," Joshua Raskin, an analyst at Lehman Brothers, said in a research note. "The upside was clearly driven by better-than-expected margins." The operating margin was 11.5 percent in the first quarter, up from 10.8 percent a year ago. The Minneapolis-based company is the first major health insurer to post quarterly results, giving an initial glimpse of cost and premium trends. Medical costs at UnitedHealth jumped more than $1.1 billion or 30 percent year-over-year -- and 6 percent since Dec. 31 -- to $4.9 billion at March 31. But the company cut operating costs to 14.9 percent of revenue, an improvement of 130 basis points from the same period a year ago. Revenue jumped 34 percent to $10.9 billion, roughly in line with the $11.0 billion expected by analysts. UnitedHealth was replaced as the largest U.S. health plan by membership last year when Anthem merged with WellPoint Networks Inc. (WLP.N: Quote , Profile , Research ) . Based on its strong first quarter performance, UnitedHealth raised its 2005 earnings outlook to a range of $4.85 to $4.90 per share, from its forecast of between $4.75 to $4.80 made in January. Analysts on average expect the company to earn $4.82 per share, on average, for the year. Shares of UnitedHealth rose 0.4 percent to $96.38 in premarket trade on the Inet brokerage, up from a close of $95.96 on Wednesday on the New York Stock Exchange. The shares reached a year high of $99.71 earlier this month. The stock is up 9 percent year-to-date, the smallest gain in the S&P Managed Health Care index since Jan 1. Rival Aetna Inc. (AET.N: Quote , Profile , Research ) leads the health insurance group with a rise of 20 percent in its stock price over that same period. Quelle "UnitedHealth Profit Up on Higher Premiums" : reuters.com Main page for "UnitedHealth Profit Up on Higher Premiums"