Revenues fall, medical ratio rises to 85.5%, stocks fall

THURSDAY, UnitedHealth Group (NYSE:UNH) reported its fourth quarter 2024 results and reaffirmed its 2025 guidance.

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

Fourth-quarter adjusted operating income of $8.3 billion excludes direct response costs to cyberattacks and South American impacts.

The medical care ratio for the full year was 85.5%, up from 83.2% in 2023. The increase was primarily due to items discussed previously, including the revenue effects of Medicare funding reductions of CMS, membership composition, and timing of Medicaid redeterminations. A lower ratio generally indicates higher profitability.

Also Read: FTC Says UnitedHealth, CVS, Cigna Make Billions Through PBMs on Specialty Drugs

“The people at UnitedHealth Group remain committed to making high-quality, affordable health care more accessible to more people while making the health care system easier to navigate for patients and providers, putting us in good stead. positioned 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 benefiting from domestic trade benefits increased by 2.4 million in 2024.

The number of people benefiting from the company’s offerings for seniors and people with complex needs increased to 9.4 million.

The number of people benefiting from the company’s state-based community offerings decreased as expected to 7.4 million due to the now-completed Medicaid eligibility reassessment process, partially offset by new customer relationships and enlarged.

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

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

Advice: UnitedHealth reaffirms its 2025 sales forecast of $450 billion, or $455 billion, versus consensus of $448.13 billion.

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

Price action: UNH stock is down 3.02% at $527 in pre-market trading at last check Thursday.

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