Medical expenses rising, UnitedHealth Group Incorporated (UNH.US) Q4 revenue below expectations.

UnitedHealth Group Incorporated (UNH.US) announced its fourth-quarter earnings and full-year performance report before the market opened on Thursday Eastern Time. The data shows that the company's Q4 revenue was $100.807 billion, slightly below analysts' average expectation of $101.73 billion. Adjusted earnings per share were $6.81, surpassing analysts' average expectation of $6.72 per share. For the 2024 fiscal year, the company's revenue increased by 8% year-over-year to $400.278 billion, with adjusted earnings per share of $27.66. UnitedHealth Group Incorporated's insurance business saw a 6% year-over-year increase in annual revenue to $298.2 billion, while Optum's annual revenue increased by 12% year-over-year to $253 billion, mainly driven by OptumRx and OptumHealth. Optum's healthcare services business serves the global healthcare market, including payers, healthcare providers, employers, government, life sciences companies, and consumers. OptumRx's drug benefit division showed strong performance, increasing by $35.8 billion in the fourth quarter, a year-over-year growth of approximately 15%, exceeding market expectations of $34.9 billion. Meanwhile, OptumHealth's medical services division generated $25.7 billion, a year-over-year growth of approximately 5%, higher than analysts' forecast of $26.9 billion. According to data compiled by LSEG, UnitedHealth Group Incorporated reported a full-year medical cost ratio of 85.5%, exceeding analysts' average expectation of 84.96%. The medical cost ratio is the total proportion of premium income used to pay for actual healthcare services (such as doctor visits, hospitalizations, medications, etc.), and is an important indicator for evaluating the efficiency and cost control capabilities of insurance companies. A higher medical cost ratio typically indicates that the insurance company is managing expenses and controlling costs well. A month before the financial report was released, Brian Thompson, the CEO of the insurance division of UnitedHealth Group Incorporated, was killed, triggering a discussion on how to deal with the challenges facing the American healthcare insurance system. UnitedHealth Group Incorporated's CEO, Andrew Witty, said, "UnitedHealth Group Incorporated's employees remain focused on providing high-quality, affordable healthcare services to more people, while making the healthcare system easier to navigate for patients and providers, which will prepare us for growth in 2025." In pre-market trading in the U.S., the stock fell by 3.2%, with other insurance companies such as Elevance Health Inc. (ELV.US) and Humana Inc. (HUM.US) also experiencing declines. UnitedHealth Group Incorporated operates the largest health insurance company in the U.S. and is the first company in the industry to report its performance, often seen as an industry benchmark. The company has been facing challenges from government funding cuts, high specialty drug costs, and other unfavorable factors. The company's insurance division has stated that its 2025 outlook reflects similar trends. UnitedHealth Group Incorporated confirmed its 2025 performance outlook, set in December 2024, including revenue expectations of $450-455 billion, earnings per share of $28.15-28.65, adjusted earnings per share of $29.50-30.00, and operating cash flow of $32-33 billion.