Health insurer restates earnings

UnitedHealth Group Inc., the largest U.S. health insurance company, restated earnings since 1994 to reduce them by $1.53 billion, closing the books on its accounting for backdated stock options.

The revisions fell within the company’s estimates and brought its filings up to date with the Securities and Exchange Commission, UnitedHealth said Tuesday. The company, based in Minnetonka, Minn., will proceed with a plan to buy back as much as $4.5 billion in stock this year. The buyback had been on hold.

The restatement ends 12 months of uncertainty for investors around the option issue, as the company sorted out how previous years’ earnings should have been reported.

“A significant overhang should be lifted from UnitedHealth shares, now that the company is current with SEC filings,” said William Georges, a J.P. Morgan Securities analyst, in a note to investors. He said investigations by the Internal Revenue Service and the Justice Department were far from resolved and might cause the shares to be volatile.

UnitedHealth shares rose $1.02 to $53.98.

When it reported fourth-quarter earnings Jan. 18, the company declined to give per-share earnings or a year-earlier profit comparison.

UnitedHealth said Tuesday that earnings last year were $2.97 a share, compared with $2.31 in 2005. Net income last year increased 35% to $4.16 billion, and revenue gained 54% to $71.5 billion.

UnitedHealth also said it expected to pay about $100 million in back taxes for the 12 years.