UnitedHealth Group (UNH), the largest U.S. health insurer, reported fourth-quarter 2024 results on Thursday that fell short of Wall Street expectations, sending its stock down 5.28% in premarket trading.
The company's revenue for the quarter grew 6.8% year-over-year to $100.81 billion, missing analysts' expectations of $101.76 billion. This miss snapped a 17-quarter streak of revenue beats for UnitedHealth.
Despite the revenue shortfall, UnitedHealth's adjusted earnings per share (EPS) rose 10.6% to $6.81, beating the consensus estimate of $6.73. The company's net earnings inched up 1.8% to $5.54 billion, or $5.98 per diluted share.
A key factor weighing on UnitedHealth's financial performance was higher medical costs. The company's medical care ratio, which measures the percentage of premiums spent on medical claims, increased to 85.5% for the full year, up from 83.2% in 2023. This rise was primarily due to Medicare funding reductions, changes in member mix, and the timing of Medicaid redeterminations.
In response to the results, UnitedHealth CEO Andrew Witty acknowledged the challenges faced by the company, including the revenue effects of Medicare funding cuts and higher medical costs driven by factors such as increased hospital coding intensity and specialty medication prescribing. However, Witty emphasized the company's focus on making high-quality, affordable healthcare more available and easier to navigate for patients and providers.
