Shares of UnitedHealth Group Inc.
UNH,
slipped 0.2% in premarket trading Friday, after the health insurer reported higher-than-expected fourth-quarter medical costs, but earnings that beat forecasts. Net income rose to $5.46 billion, or $5.83 a share, from $4.76 billion, or $5.03 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of $6.16 beat the FactSet consensus of $5.98. Revenue grew 14.1% to $94.43 billion, well above the FactSet consensus of $92.13 billion, as UnitedHealthcare revenue rose 12.4% to $70.8 billion and Optum revenue increased 24.2% to $59.5 billion. The medical care ratio, or the ratio of medical costs to premium revenue, was 85% compared with expectations of 84.1%. For 2024, the company reiterated its guidance range for adjusted EPS of $27.50 to $28.00 and for revenue of $400 billion. The company said, however, that the earnings outlook will be impacted when the sale of its Brazil operations closes in the first half of 2024. The stock has edged up 2.7% over the past three months through Thursday, while the Health Care Select Sector SPDR ETF
XLV,
has rallied 8.9% and the Dow Jones Industrial Average
DJIA,
has run up 12.1%.
