* Revenue rises 10 percent
* Backs 2011 view of $3.50-$3.70/share
* Nudges up 2011 rev view to $100 bln
* Company shuffles management, names new CFO
* Shares fall 1.6 percent, after strong 2011 run (Adds portfolio manager comment, company comments)
By Lewis Krauskopf
NEW YORK, Jan 20 (Reuters) - UnitedHealth Group Inc posted a higher-than-expected fourth-quarter profit as enrollment grew across its health insurance plans and Americans saved money by using fewer medical services.
UnitedHealth also announced a shuffling of its top management, including a new chief financial officer, which could set up succession plans at the largest U.S. health insurer by market value.
UnitedHealth, the first insurer to report fourth-quarter results, backed its 2011 profit forecast while raising its revenue projection slightly.
Health insurers benefited throughout 2010 from more people postponing doctor visits and procedures to sustain themselves in the weak U.S. economy, and UnitedHealth had previously suggested its fourth-quarter results could beat expectations if the use of medical services remained low.
"I expect utilization to remain moderate, and if it does, there's probably upside to current guidance," Wedbush Securities analyst Sarah James said.
UnitedHealth's shares fell 1.6 percent to $39.88 in late morning trading on the New York Stock Exchange. The stock has risen 12 percent so far in 2011, compared with an 8.5 percent increase for the Morgan Stanley Healthcare index of health insurers and a 2 percent rise for the broader Standard & Poor's 500 index.
Shares of WellPoint Inc and Aetna Inc, UnitedHealth's two biggest rivals, were off 1 percent and 1.3 percent, respectively.
Sanford Bernstein analyst Ana Gupte called it a "very strong quarter," but said investors might look for some weakness in UnitedHealth stock before buying shares, noting the stock's recent run.
Insurers face new rules this year from the healthcare overhaul passed in 2010 that will require them to meet spending thresholds for medical care as opposed to administrative costs and profit, potentially crimping their results.
UnitedHealth, whose diversity and size make it a bellwether for the industry, said fourth-quarter net income rose 10 percent to $1.04 billion, or 94 cents per share, from $944 million, or 81 cents per share, a year earlier.
Analysts on average had expected 84 cents per share, according to Thomson Reuters I/B/E/S. Some analysts also excluded a charge for a sale from their calculations, making the beat even greater than 10 cents per share.
Revenue rose 10 percent to $24.03 billion. Analysts had expected $23.75 billion.
"I think a lot of people were expecting a good quarter and they delivered a good quarter, and it was a sort of sell the news," said Les Funtleyder, a healthcare portfolio manager at Miller Tabak.
ENROLLMENT UP ACROSS THE BOARD
Enrollment in UnitedHealth's plans rose 3 percent to 37.5 million.
Enrollment in its commercial plans serving employers increased 8 percent. Membership in its Medicare Advantage plans for the elderly rose 16 percent, while its Medicaid plans for low-income Americans grew 14 percent.
"The various business lines seemed to perform well, with enrollment up sequentially in every reportable segment," Wells Fargo analyst Peter Costa said.
UnitedHealth named David Wichmann, who had previously been president of operations, as chief financial officer. He replaces Mike Mikan, who will take responsibility for oversight of health services, such as its information technology businesses, an area where the company is placing greater emphasis.
UnitedHealth also said Gail Boudreaux would assume responsibility for all of UnitedHealth's health benefits businesses, widening her scope beyond commercial plans.
The appointments, effective immediately, appeared to be setting up a possible horse race among the three executives to succeed Chief Executive Officer Stephen Hemsley. Hemsley, 58, had his contract renewed in December for four years.
The company also said it intended to sell its clinical trial support businesses for mid- and late-stage studies to privately held inVentiv Health. UnitedHealth did not specify the sale price, but Citigroup estimated the unit to be worth $400 million to $500 million.
Minneapolis-based UnitedHealth continues to forecast 2011 earnings per share at $3.50 to $3.70, representing a decline of about 10 percent to 15 percent from 2010.
It said it expected 2011 revenue at the top end of its prior forecast range of $99 billion to $100 billion, citing strong customer retention, growth across its businesses and contributions from recent deals. Company officials also said enrollment in its Medicare and commercial plans for 2011 was tracking at the high end of its forecasts.
After an unusually weak flu season last year that kept costs low, early data indicated that 2011 would bring more normal flu levels, UnitedHealth executives said. (Reporting by Lewis Krauskopf; Editing by Gerald E. McCormick, Matthew Lewis and Maureen Bavdek)