UnitedHealth Q4 Earnings: Revenue Falls Short, Medical Ratio Rises To 85.5%, Stock Falls

On Thursday, UnitedHealth Group UNH reported the fourth-quarter 2024 earnings and reaffirmed 2025 guidance.

The company reported adjusted EPS of $6.81, up from $6.16 a year ago, beating the consensus of $6.72. Revenues increased 6.8% year over year to $100.8 billion, missing the consensus of $101.76 billion.

Fourth-quarter adjusted earnings from operations of $8.3 billion exclude the cyberattack direct response costs and South American impacts.

The full-year medical care ratio was 85.5% compared to 83.2% in 2023. The increase was primarily due to previously discussed items, including the revenue effects of CMS's Medicare funding reductions, member mix and timing of Medicaid redeterminations. A lower ratio typically indicates higher profitability.

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"The people of UnitedHealth Group remain focused on making high-quality, affordable health care more available to more people while making the health system easier to navigate for patients and providers, positioning us well for growth in 2025," said UNH CEO Andrew Witty.

UnitedHealthcare reported revenue of $74.1 billion, up from $70.8 billion a year ago. The number of consumers served with domestic commercial benefits grew by 2.4 million in 2024.

The number of people served by the company's offerings for seniors and people with complex needs grew to 9.4 million.

People served by the company's state-based community offerings moderated as expected to 7.4 million due to the now concluded Medicaid eligibility redeterminations process, partially offset by new and expanded customer relationships.

Optum reported $65.1 billion in revenue, up from $59.5 billion a year ago.

Optum Health served 4.7 million people with value-based care and expects to grow to serve an additional 650,000 patients in 2025.

Guidance: UnitedHealth reaffirms its 2025 sales guidance of $450 billion—$455 billion, compared to a consensus of $448.13 billion.

The company expects 2025 adjusted EPS of $29.50-$30.00 versus the consensus of $29.83 and operating cash flow of $32 billion—$33 billion.

Price Action: UNH stock is down 3.02% at $527 during the premarket session on the last check Thursday.

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