UnitedHealth Group annual profit falls, in first report since exec's killing
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The owner of UnitedHealthcare reported record full-year revenue but lower profits for 2024, just weeks after the brazen killing of a top executive inflamed the national ire against insurance companies.
Why it matters: It's the first earnings report for UnitedHealth Group since Brian Thompson's killing in early December sparked a national conversation about the U.S. health care industry's profits and coverage denials.
By the numbers: UnitedHealth Group posted revenue of $400.3 billion for the full year, up 7.8% from 2023.
- Annual net earnings totaled $14.4 billion, down 35.6% from 2023, as it grappled with the aftermath of a cyber attack.
- The full-year performance fell short of S&P Capital IQ estimates of $15.82 billion in earnings and $401.2 billion in revenue.
- Its profits are still large enough, though, to rank among America's 25 most profitable companies.
- In the fourth quarter, revenue increased 6.8% from a year earlier to $100.8 billion, while net earnings rose 1.6% from a year earlier to $5.5 billion.
- Fourth-quarter adjusted earnings of $6.81 per share exceeded the average estimate of analysts surveyed by Bloomberg by 10 cents.
What they're saying: "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," UnitedHealth Group CEO Andrew Witty said in a statement.
- The company. which will hold an earnings call at 8:45 am, did not mention Thompson in its earnings press release.
- Witty said in a New York Times op-ed last month that the U.S. health care system is a "patchwork built over decades" that no one would design from scratch and that the company is "willing to partner with anyone ... to find ways to deliver high-quality care and lower costs."
Between the lines: UnitedHealth Group's medical care ratio — the percentage of premiums spent on health care — rose from 83.2% in 2023 to 85.5% in 2024.
- The company attributed the increase to "Medicare funding reductions, member mix and timing of Medicaid redeterminations."
- For the UnitedHealthcare division, which Thompson ran, revenue totaled $298.2 billion for 2024, up 6%. Earnings from operations for UHC fell from $16.4 billion in 2023 to $15.6 billion in 2024.
Flashback: One of the largest cyber attacks in health care history, last February, weighed on 2024 results.
- The attack disrupted the processing of claims and payments to health providers and cost the company billions of dollars.
What to watch for: UnitedHealth Group reaffirmed its 2025 outlook, with projected revenue of $450 billion to $455 billion and projected net earnings of $28.15 to $28.65 per share.
- Shares fell more than 3% in pre-market trading. The stock is down about 11% since Thompson's death, which has helped drag broader markets lower.
