UnitedHealth Group (UNH) -) posted stronger-than-expected fourth-quarter earnings Friday as its Optum benefits division continued to power its top and bottom lines while offsetting a modest increase in medical costs.
UnitedHealth said adjusted earnings for the three months ended in December came in at $6.16 a share, up 15.4% from the year-earlier period and 18 cents ahead of the Wall Street consensus forecast of $5.98 a share.
Group revenue rose 14% to $94.4 billion, again topping analysts' estimates of a $92.4 billion tally, while Optum revenue rose 24.2% to $59.5 billion.
UnitedHealth's medical-cost ratio, meanwhile, was pegged 20 basis points (0.2 percentage point) higher at 83.2% for the year, suggesting a modestly larger portion of its collected premiums were paid out on insurance claims.
For the fourth quarter, UnitedHealth's medical-cost ratio was 85%, up from 82.8% over the year-earlier period. Overall premiums were up 13.2% to $73.23 billion while operating costs rose 14.3% to $86.74 billion.
“UnitedHealth Group enters 2024 well prepared to build on our efforts to improve patient care and consumer experiences broadly, and to continue delivering strong and balanced growth,” Chief Executive Andrew Witty said in a statement.
UnitedHealth shares, a Dow component, were marked 3% lower in early trading immediately following the earnings release to change hands at $523.84 each.
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