UnitedHealth cuts 2008 outlook as premiums slip
by The Associated Press

MINNEAPOLIS -- Health insurer UnitedHealth Group has lowered its 2008 profit outlook.

UnitedHealth says reduced commercial business and higher-than-expected Medicare-related costs altered the outlook.

Shares slipped 2.4 percent, or 62 cents, to $25.01 in premarket trading.

Separately, the company also said it agreed to pay $895 million to settle a class action lawsuit with the California Public Employees Retirement System (CalPERS) and Alaska Plumbing and Pipefitting Industry Pension Trust. The complaint is a 2006 suit filed in the U.S. District Court in Minnesota related to historical stock options practices.

The company now forecasts 2008 adjusted profit of $2.95 to $3.05 per share on revenue in the $81 billion range, down from prior estimates of $3.55 to $3.60 per share. Analysts surveyed by Thomson Financial expected profit of $3.52 per share on revenue of $81.02 billion.