« Richard Parsons' Family Crest | Main | Let Us Hear From You »

From the Wall Street Journal:

UnitedHealth Group Inc., becoming the latest company to acknowledge problems with the way it administered its stock-option grants, warned that it might have to restate past results, lose some valuable tax deductions and take charges that could reduce the past three years' net earnings by $286 million.

The giant health-care company also disclosed in its first-quarter filing with the Securities and Exchange Commission that is the subject of an "informal" SEC inquiry into its stock option granting practices.

UnitedHealth said option related matters could reduce operating earnings by up to $393 million in the past three years, and net income by up to $286 million. It didn't detail the potential effect on earlier years' results, though the review goes back to 1994. The biggest impact of the past three years, the company said, would be in 2005 when the company said it could take a 4.5% hit on net earnings, which would drop by $150 million, or 11 cents a share.

UnitedHealth, which previously maintained that its option grant practices were "appropriate", stressed that the reviews were ongoing and that neither the special committee nor the company had reached final decisions.

After a strong day yesterday, the stock is lower at the open.

Posted by edelfenbein at May 11, 2006 9:53 AM