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UnitedHealth reaffirmed its outlook for next year. I pay close attention to these "reaffirm" announcements, and I think too many investors overlook them. For me, it's nice to see a company give guidance at some point, but I'm impressed to see them back it up a few weeks later. In fact, I'm often surprised by how many good stocks are hidden in plain site. The company is clearly telling us how well things are going:

The company previously estimated 2006 earnings in a range of $4.14 billion to $4.16 billion on revenue of $71.5 billion. For 2007, UnitedHealth forecast earnings of $4.7 billion to $4.75 billion on about $79.5 billion in revenue.

Analysts polled by Thomson Financial expect 2006 earnings of $2.97 per share on $71.52 billion in revenue and forecast 2007 earnings of $3.43 on $78.45 billion in revenue. The company did not provide a per-share earnings estimate.

In a filing with the Securities and Exchange Commission, UnitedHealth said its outlook reflects the range of $25 million to $60 million in costs it may incur related to a revision in its accounting of stock options.

The company announced last month that, following a review of historical stock option practices, it expects to book an additional $400 million to $600 million in stock options expenses for the period from 1994 to 2005.

I'm not sure why they didn't give an EPS estimate. If we assume UNH will have 1.35 billion shares, that translates to a range of $3.48 to $3.52 a share. That means that the stock is going for just over 15 times 2007's earnings.

Posted by edelfenbein at January 8, 2007 12:00 PM