UnitedHealth Group Q4 Earnings Report: Revenue Misses Expectations, Medical Care Ratio Rises

UnitedHealth Group Q4 Earnings Report: Revenue Misses Expectations, Medical Care Ratio Rises

On Thursday, UnitedHealth Group (NYSE: UNH) released its fourth-quarter 2024 earnings, highlighting mixed results and reaffirming its 2025 guidance.

Key Financial Highlights:

• Adjusted EPS: $6.81, up from $6.16 a year ago, beating the consensus estimate of $6.72.
• Revenue: $100.8 billion, a 6.8% year-over-year increase, but below the consensus estimate of $101.76 billion.
• Earnings from Operations: $8.3 billion (excluding costs related to the cyberattack response and South American impacts).

Medical Care Ratio:

The full-year medical care ratio rose to 85.5%, compared to 83.2% in 2023. The increase reflects several factors, including:

• Revenue effects of CMS Medicare funding reductions.
• Changes in member mix.
• Timing of Medicaid redeterminations.

A higher medical care ratio suggests rising costs relative to premiums, which can pressure profitability.

Business Segment Performance:

• UnitedHealthcare:

  • Revenue rose to $74.1 billion, up from $70.8 billion in the prior year.
  • Domestic commercial benefits served an additional 2.4 million consumers in 2024.
  • Services for seniors and individuals with complex needs expanded to 9.4 million people.

• Optum:

  • Revenue climbed to $65.1 billion, up from $59.5 billion last year.
  • Optum Health provided value-based care to 4.7 million people and aims to add 650,000 patients in 2025.

2025 Guidance:

• Revenue: Projected at $450 billion–$455 billion, surpassing the consensus of $448.13 billion.
• Adjusted EPS: Estimated at $29.50–$30.00, compared to the consensus of $29.83.
• Operating Cash Flow: Expected between $32 billion–$33 billion.

CEO Commentary:

Andrew Witty, CEO of UnitedHealth Group, stated:
"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."

Stock Performance:

UnitedHealth's stock fell 3.02% in premarket trading, reaching $527 as of the last check on Thursday.

The report underscores the company's growth in key segments despite challenges in meeting revenue expectations and rising medical care ratios. Investors remain cautious, as reflected in the stock's decline.