UnitedHealth Group (UNH) shares edged lower Tuesday after it forecast softer-than-expected 2023 profits ahead of an investor conference later today in New York.
UnitedHealth said adjusted profits for the coming year, which begins in January, will likely range between $24.40 to $24.90 per share, just shy of Refinitiv forecasts of $24.94 per share, with overall revenues in the region of $357 billion to $360 billion.
"Obviously, for the last couple of years, there is been a lot of focus on the effect of COVID as you think about impacts on medical cost trend," CEO Andrew Witty told investors in October. "There is now a blend of possibly a little bit of COVID effect in the system, but cost of living effects, things like inflation, things like capacity constraints as the labor market tightness has affected different parts of the system at different moments."
"So, I think this whole issue has become actually more complicated in some ways because there is more influences on what you need to think through going forward," he added.
UnitedHealth shares, a Dow component, were marked 1% lower in early Tuesday trading to change hands at $526.87 each, a move that trims the stock's six-month gain to around 6.1%.
Last month, UnitedHealth said adjusted profits for the three months ended in September rose 28% from last year to $5.79 a share, powered once again by double-digit gains from its Optum division.
Overall group revenues were up 11.8% to $80.9 billion, again topping analysts' estimates of an $80.5 billion tally, while Optum revenue rose 17.1% to $46.6 billion.
Earlier this fall, Judge Carl Nichols of the U.S. District Court for the District of Columbia denied a request from the Department of Justice to block UnitedHealth's proposed merger with healthcare technology group Change Healthcare (CHNG).
The DoJ had raised antitrust concerns over the $8 billion deal, first unveiled in January, and argued that it would give UnitedHealth access to healthcare plans offered by rival such as Humana (HUM) and Anthem, while allowing the combined group to service around 95% of the top health insurance companies in the country.
Judge Nichols, however, allowed the deal go ahead, provided UnitedHealth completes the agreed $2.2 billion sale of Change's claims edit subsidiary, ClaimsXten, to a private equity group.
