Why UnitedHealth Stock Was Pulling Back Today

Core Viewpoint - UnitedHealth Group's fourth-quarter results were disappointing, with weaker-than-expected sales and rising costs leading to a significant stock pullback [1] Financial Performance - Revenue for the quarter increased by 6.8% to $100.8 billion, falling short of analysts' consensus estimate of $101.7 billion [2] - UnitedHealthcare's revenue rose 4.7% to $74.1 billion, driven by an increase in customer base [2] - Optum's revenue grew by 9.4% to $65.1 million, although there are overlaps in revenue across divisions [2] - The profit margin decreased from 5.8% to 5.5%, with a rise in the medical loss ratio to 87.6% [2] - Adjusted earnings per share were reported at $6.81, an increase from $6.18 a year ago, slightly exceeding the consensus estimate of $6.74 [3] Future Outlook - For 2025, UnitedHealth reaffirmed its revenue outlook of $450 billion to $455 billion and adjusted earnings per share of $29.50 to $30 [4] - The company faces pressure from higher medical expenses and tighter government payment policies, with some legislators advocating for the breakup of large pharmacy benefit managers like OptumRx [4] - Despite expectations for steady growth in 2025, the healthcare industry is under broad pressure, and higher loss ratios may warrant caution among investors [5]