UnitedHealth Group Inc (UNH.N), the largest U.S. private health insurer, on Monday gave a weaker-than-expected 2013 earnings forecast, backing up earlier statements that next year would be a tough one.
UnitedHealth said it expects 2013 earnings of $5.25 to $5.50 per share, below analysts' estimates of $5.58 per share.
The outlook came after the company said in October that analysts' estimates for 2013 were too high due to the weak economy and government efforts to rein in the deficit. At that time, the Wall Street consensus earnings estimate was $5.60 per share.
Since its last financial outlook, U.S. President Barack Obama was re-elected and restarted negotiations with Republicans on a plan to avoid the "fiscal cliff" - a combination of U.S. tax increases and spending cuts scheduled for January 1 that could throw the nation back into recession.
UnitedHealth shares fell 97 cents, or 1.8 percent, to $52.96 near midday on the New York Stock Exchange.
Revenue should be $123 billion to $124 billion next year, higher than the Wall Street target, UnitedHealth said in a statement ahead of a Tuesday meeting with analysts and investors.
Analysts estimated 2013 revenue of $119.12 billion, according to Thomson Reuters I/B/E/S.
"As expected, 2013 guidance seems conservative, but prudently so, as it's a first look at the year and there is still a cloud of uncertainty around the 'fiscal cliff' and debt ceiling issues," Sheryl Skolnick, an analyst at CRT Capital Group, said in a research note.
The fiscal cliff and debt ceiling issues could affect the economy and UnitedHealth's Medicare Advantage government health insurance program for older people, Skolnick said.
UnitedHealth has a history of beating its forecasts, Oppenheimer analyst Michael Wiederhorn said in a research note. He also said it was not immediately clear if the Wall Street consensus outlook for 2013 revenue was comparable and included sales from Brazil's Amil Participacoes SA AMIL3.SA. UnitedHealth is in the process of buying the Brazilian company for $4.9 billion.
UnitedHealth also reaffirmed its 2012 outlook for earnings of $5.20 to $5.25 per share.
(Reporting by Caroline Humer; Editing by Lisa Von Ahn, Jeffrey Benkoe and John Wallace)