UnitedHealth Group's latest financial results have revealed higher medical costs than Wall Street anticipated, contributing to a decline in its stock price. The company's medical-loss ratio, which indicates the percentage of premiums spent on patient care, increased to 85.5% for the full year, a figure that investors typically prefer to be lower. This rise in medical costs, coupled with fourth-quarter revenue that fell short of expectations, has raised concerns among investors. The company also faced significant challenges, including a costly cyberattack and the tragic death of a top executive, which have further complicated its financial outlook.
Despite these hurdles, UnitedHealth reported $14.4 billion in profits for 2024, with $5.5 billion in the fourth quarter alone. However, this represents the lowest annual net income in five years, reflecting the impact of increased medical expenses and the cyberattack. The company's revenue for the year grew by 8% to $400.3 billion, driven by its Optum and UnitedHealthcare divisions. UnitedHealth has maintained its 2025 guidance, projecting revenues between $450 billion and $455 billion, but the market remains cautious given the current cost pressures and industry headwinds.
UnitedHealth (UNH) shares have fallen 3.21% to $525.95 as of 7:51 am on January 16th, down from the previous close of $543.42.