Core Insights - UnitedHealth Group Incorporated (UNH) reported strong fourth-quarter 2024 adjusted earnings per share (EPS) of $6.81, exceeding the Zacks Consensus Estimate of $6.71, marking a year-over-year increase of 10.6% [1] - The company's revenues rose 6.8% year over year to $100.8 billion, although this figure missed the consensus mark by 1.4% due to lower-than-expected premiums [2] - For the full year 2024, UNH's revenues reached $400.3 billion, up from $371.6 billion in 2023, but fell short of the Zacks Consensus Estimate of $401.7 billion [3] Financial Performance - The medical care ratio (MCR) for 2024 was 85.5%, an increase from 83.2% in 2023, exceeding the Zacks Consensus Estimate of 85.07% [4] - Total operating costs for the fourth quarter were $93 billion, a 7.3% increase year over year, but lower than the model estimate of $93.5 billion [5] - Operating earnings grew 1.1% year over year to $7.8 billion in the fourth quarter, while the net margin decreased by 30 basis points to 5.5% [6] Business Segment Performance - Revenues from the health benefits business, UnitedHealthcare, increased 4.7% year over year to $74.1 billion, but missed the Zacks Consensus Estimate of $75.5 billion [7] - The Optum business line reported revenues of $65.1 billion, a 9.4% year-over-year increase, although it fell short of the consensus mark of $67 billion [8] - Membership in the UnitedHealthcare business decreased by 3.9% year over year to 50.68 million, primarily due to declines in global commercial and Medicaid memberships [9] Financial Position - As of December 31, 2024, UnitedHealth had cash and short-term investments of $29.11 billion, down from $29.63 billion at the end of 2023 [10] - Total assets increased to $298.28 billion from $273.72 billion at the end of 2023, while long-term debt rose to $72.36 billion from $58.26 billion [10] - Total equity improved to $98.27 billion from $94.42 billion at the end of 2023, with operating cash flows for 2024 at $24.2 billion, down from $29.1 billion in the prior year [11] Capital Deployment - In 2024, UnitedHealth returned over $16 billion to shareholders through share repurchases ($9 billion) and dividends ($7.5 billion) [12] 2025 Outlook - Management projects adjusted net EPS for 2025 to be between $29.50 and $30, with revenues estimated between $450 billion and $455 billion [13]

Financial Data and Key Metrics Changes - In 2024, revenues exceeded $400 billion, with adjusted earnings per share at $27.66, aligning with the outlook set over a year ago [25] - The medical care ratio for 2024 was 150 basis points above the original outlook, leading to a nearly $5 billion gap to overcome, compounded by a $1 billion impact from a cyberattack [27][28] - The operating cost ratio improved by about 150 basis points over the prior year, driven by business portfolio initiatives and operating efficiencies [35] Business Line Data and Key Metrics Changes - Optum Health revenues grew to approximately $105 billion in 2024, expected to approach $117 billion in 2025, with a projected increase of 650,000 value-based care patients [37] - Optum Rx revenues in 2024 reached over $130 billion, anticipated to be about $146 billion in 2025, with customer retention exceeding 98% and a record 750 new clients [42] - UnitedHealthcare's full-year revenues in 2024 approached $300 billion, expected to reach around $340 billion in 2025, with growth driven by self-funded offerings [44] Market Data and Key Metrics Changes - The company expects to serve an additional 1.9 million people across both commercial and public sectors in 2025, with a notable increase in Medicare Advantage and Medicaid participation [44][46] - The company anticipates a full-year medical care ratio of 86.5% for 2025, reflecting a mix shift toward public sector offerings and the second year of Medicare funding cuts [35] Company Strategy and Development Direction - The company aims to improve healthcare quality and outcomes while lowering costs, focusing on value-based care and enhancing digital tools for consumers [12][13] - There is a commitment to fully phase out non-pass-through rebate arrangements by 2028, ensuring transparency in drug pricing [20][21] - The company is focused on modernizing its operations and enhancing consumer experiences, particularly in claims processing and patient engagement [126][128] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the pricing adequacy for 2025, citing strong retention and insights into consumer care needs [31][33] - The company remains committed to a long-term growth objective of 13% to 16%, reflecting the opportunities and capabilities available [52] - Despite challenges in 2024, management is optimistic about the future, emphasizing the potential for improvements in the healthcare system [22][23] Other Important Information - The company deployed nearly $17 billion in growth capital in 2024 and returned over $16 billion to shareholders through dividends and share repurchases [48] - The company is committed to enhancing consumer engagement, with 85% of value-based patients engaged in 2024, marking a significant improvement [77] Q&A Session Summary Question: Cost trends and MLR variance - Management confirmed that nothing observed in Q4 changes the outlook for 2025, with stabilization in cost trends expected [56][58] Question: Change in consumer count in Optum Health - Management noted that the drop in consumer count was due to strategic initiatives and a shift in focus away from certain services like urgent care [67][70] Question: PBM reform implications - Management emphasized the importance of PBMs in negotiating drug prices and committed to full transparency and pass-through of rebates to clients [84][92] Question: Medicare Advantage advance notice for 2026 - Management indicated that it is too early to speculate on the advance notice but looks forward to engaging with the new administration [100][101] Question: Medicare Advantage growth expectations - Management expects more than 50% of full-year growth to come from the Annual Enrollment Period (AEP) and remains confident in long-term growth rates [115][118]

Core Viewpoint - UnitedHealth Group reported mixed fourth-quarter results, with revenue growth but a miss on revenue expectations, leading to its underperformance in the Dow Jones index [1][3]. Financial Performance - Revenue for the fourth quarter increased by 6.8% year over year to $100.8 billion, driven by a 4.4% rise in premiums to $76.5 billion [1]. - Earnings per share (EPS) rose by 10.6% from the previous year to $6.81, exceeding Wall Street's expectation of $6.72 [3]. - However, the revenue fell short of analysts' expectations of $101.8 billion, marking the first top-line miss since Q2 2020 [3]. Future Outlook - UnitedHealth reaffirmed its 2025 outlook, projecting revenue between $450 billion to $455 billion and EPS between $29.50 to $30 [4]. Market Performance - Over the past 12 months, UnitedHealth has underperformed the market, with a total return of 6% compared to the S&P 500's 26% gain [5]. - Despite this, Wall Street remains bullish on the stock, with an average analyst target price of $639.16, indicating an implied upside of over 20% [6]. Analyst Insights - Analysts highlight UnitedHealth's strong diversification, management team, and growth potential, particularly through its Optum business, which complements its core operations [7][8].

Core Insights - UnitedHealth Group reported $100.81 billion in revenue for Q4 2024, a year-over-year increase of 6.8% [1] - The EPS for the same period was $6.81, compared to $6.16 a year ago, with a surprise of +1.49% against the consensus estimate of $6.71 [1] Revenue Performance - The reported revenue of $100.81 billion was below the Zacks Consensus Estimate of $102.25 billion, resulting in a surprise of -1.41% [1] - Investment and other income reached $1.55 billion, exceeding the estimate of $1.21 billion by 31.6% year-over-year [4] - Products revenue was $13.48 billion, surpassing the $13.04 billion estimate, reflecting a 19.1% increase year-over-year [4] - Services revenue was $9.30 billion, slightly below the estimate of $9.37 billion, with a year-over-year increase of 6.8% [4] - Premiums revenue was $76.48 billion, lower than the $78.16 billion estimate, showing a 4.5% year-over-year increase [4] - Optum Rx revenue was $35.77 billion, exceeding the estimate of $35.34 billion, with a year-over-year increase of 14.8% [4] - Optum Health revenue was $25.66 billion, below the estimate of $27.28 billion, reflecting a 4.6% year-over-year increase [4] - Total UnitedHealthcare revenue was $74.13 billion, lower than the $75.52 billion estimate, with a year-over-year increase of 4.7% [4] Customer Metrics - Total medical customers served by UnitedHealthcare reached 50.68 million, exceeding the average estimate of 50.36 million [4] - Total domestic commercial customers served was 29.73 million, in line with the average estimate of 29.7 million [4] - Risk-based commercial domestic customers were 8.85 million, slightly below the average estimate of 8.87 million [4] - Fee-based commercial domestic customers were 20.89 million, slightly above the average estimate of 20.83 million [4] Stock Performance - UnitedHealth shares returned +8.7% over the past month, outperforming the Zacks S&P 500 composite's -1.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1: Medicare Advantage Payment Increase - Government payments to Medicare Advantage plans are projected to rise by an average of 4.33% in 2026, with an effective growth rate of 2.23% after adjusting for patient risk scores, resulting in an additional $21 billion in the Medicare Advantage space by 2026 [1][2] Group 2: Market Leaders - UnitedHealth Group, Humana, and CVS Health control nearly 60% of the Medicare Advantage market and are expected to benefit significantly from the payment increase [2] - UnitedHealth Group served over 7.8 million Medicare Advantage enrollees in Q3 2024, marking a 2.2% year-over-year increase, with a market capitalization exceeding $500 billion [3] - Humana reported over 6.2 million Medicare Advantage members in Q3 2024, reflecting a 5.5% increase from the previous year, with a market cap of $33.7 billion [4] - CVS Health experienced a 29.1% year-over-year increase in Medicare Advantage membership, serving over 4.4 million enrollees, with a market cap of $65.6 billion [5] Group 3: Policy Developments and Regulatory Outlook - The final payment rate will be influenced by feedback from insurers and stakeholders, with the finalized policy expected to be announced by April 7, 2025 [6] - Under the Inflation Reduction Act, out-of-pocket prescription drug costs for Medicare enrollees are capped at $2,000 for 2025, increasing to $2,100 in 2026, with projected federal spending of $9.2 trillion on MA payments over the next decade [7] - The sector faces scrutiny regarding care denials and alleged overpayments, which may introduce regulatory challenges [7][8]

Group 1: Earnings Performance - UnitedHealth Group reported quarterly earnings of $6.81 per share, exceeding the Zacks Consensus Estimate of $6.71 per share, and up from $6.16 per share a year ago, representing an earnings surprise of 1.49% [1] - The company posted revenues of $100.81 billion for the quarter ended December 2024, which missed the Zacks Consensus Estimate by 1.41%, compared to year-ago revenues of $94.43 billion [2] Group 2: Stock Performance and Outlook - UnitedHealth shares have increased approximately 7.4% since the beginning of the year, outperforming the S&P 500's gain of 1.2% [3] - The current consensus EPS estimate for the upcoming quarter is $7.27 on revenues of $109.5 billion, and for the current fiscal year, it is $29.79 on revenues of $451.52 billion [7] Group 3: Industry Context - The Medical - HMOs industry, to which UnitedHealth belongs, is currently ranked in the bottom 16% of over 250 Zacks industries, indicating potential challenges ahead [8] - Another competitor in the same industry, Humana, is expected to report a quarterly loss of $2.23 per share, reflecting a significant year-over-year decline of -1927.3%, with revenues projected at $28.82 billion, up 12% from the previous year [9]

Group 1 - UnitedHealth Group (UNH) shares declined by 5% in premarket trading following fourth-quarter results that fell short of analysts' expectations [1] - The company's revenue increased by 7% year-over-year to $100.8 billion, which was below the Visible Alpha consensus [1] - Earnings for the quarter were reported at $5.54 billion, or $5.98 per share, also missing analysts' estimates, although adjusted earnings per share (EPS) of $6.81 exceeded expectations [1] Group 2 - UnitedHealth Group reaffirmed its 2025 outlook, projecting revenue between $450 billion and $455 billion, with EPS of $28.15 to $28.65, and adjusted EPS of $29.50 to $30.00 [2] - The reported results marked the first since the fatal shooting of Brian Thompson, the CEO of its UnitedHealthcare unit, on December 4 [2]

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 20 ...

About this content About Oliver Haill Oliver has been writing about companies and markets since the early 2000s, cutting his teeth as a financial journalist at Growth Company Investor with a focusing on AIM companies and small caps, before a few years later becoming a section editor and then head of research. He joined Proactive after a couple of years freelancing, where he worked for the Financial Times Group, ITV, Press Association, Reuters sports desk, the London Olympic News Service, Rugby World Cup ...

UnitedHealth Group Thursday reported $14.4 billion in 2024 profits including $5.5 billion in the ... [+] fourth quarter as its portfolio of health insurance and provider services overcame rising medical expenses and an historic cyberattack on its businesses. In this photo is a general view outside the United Healthcare corporate headquarters on December 4, 2024 in Minnetonka, Minnesota on December 4, 2024, the same day United Healthcare CEO Brian Thompson was shot dead on the street in New York City before ...