UnitedHealth's $3.3 Billion Asset Sales Helped Sustain 15-Year Earnings Streak Amid Pressure

For approximately 15 years, or 60 quarters, UnitedHealth Group Inc. UNH has consistently reported better-than-expected quarterly earnings.

However, in the fourth quarter of 2024, the insurance giant reported mixed earnings, and in the first quarter of 2025, earnings fell short of expectations. UnitedHealth blamed rising medical costs.

According to a Bloomberg report, the company extended its 15-year streak of beating Wall Street earnings expectations in 2024, but only with the help of asset sales that analysts later described as unusual and potentially misleading.

The healthcare giant sold stakes in business units to private equity firms Warburg Pincus and KKR & Co. Inc. KKR late last year, quietly generating $3.3 billion in profit that helped bolster fourth-quarter earnings.

These transactions, many finalized just before the year-end and kept private even after closing, raised concerns among observers who viewed them as a strategic move to meet earnings targets.

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Some deals included terms requiring UnitedHealth to repurchase the stakes later at a higher price, suggesting a temporary earnings boost rather than a long-term gain.

The report on Tuesday added that UnitedHealth reported the profits from these sales as part of its operating income and adjusted earnings per share—two key financial metrics—while excluding a $7.1 billion loss from its Brazil business.

The company stated that the Brazil exit was a rare event tied to foreign currency fluctuations, justifying its exclusion under U.S. accounting rules. Critics, however, argue that the selective inclusion and exclusion of such items skews the true picture of the company's performance.

Despite these concerns, UnitedHealth defended its accounting choices, calling them part of routine "portfolio refinement."

UnitedHealth's performance stumbled in early 2025 amid rising Medicare Advantage costs.

The company, which reported underwhelming first-quarter 2025 earnings, suspended its 2025 outlook in May, citing that care activity continued to accelerate.

The timing of UnitedHealth’s earnings is important, especially in light of Centene Corp's CNC withdrawal of its 2025 GAAP and adjusted diluted EPS guidance, which stems from its initial review of 2025 industry data from Wakely, an independent actuarial firm.

The company will release its second quarter 2025 financial results on July 29. Analysts estimate adjusted earnings of $4.95 per share on sales of $111.69 billion, as per data from Benzinga Pro.

Price Action: UNH stock is up 0.34% at $292.70 at the last check on Wednesday.

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