UnitedHealth tops profit forecasts, but medical costs linger for the healthcare giant

UnitedHealth posted a better-than-expected profit in the final quarter of 2024, but a nagging increase in medical costs and care utilization surprised Wall Street.

Shares in the healthcare giant fell early Thursday after it released its first financial report since cheeky shooting by one of its leaders outside a New York hotel touched a national nerve and brought American frustration over access to health care to the surface.

UnitedHealth executives began a call with analysts Thursday morning by thanking condolences the company has received since the Dec. 4 death of Brian Thompson, chief executive of the company’s UnitedHealthcare business.

“Brian helped build this company and created deep, trusting relationships for over 20 years, and the positive impact he had on people will be felt for years to come,” said Chief Financial Officer John Rex.

In the recently completed fourth quarter, more than 87% of the premiums UnitedHealth collected in the fourth quarter went out the door to cover medical costs, which was “well above” what analysts expected, TD Cowen analyst Ryan Langston said in a research note. .

UnitedHealth said it is still dealing with an increase in prescriptions for expensive specialty drugs and other cost pressures it described in previous quarters. The company’s net income rose slightly to $5.54 billion in the quarter.

The adjusted result totaled USD 6.81 per share. stock. The company’s revenue rose about 7% to $100.8 billion, missing expectations.

Analysts expected fourth-quarter earnings of $6.73 per share on $101.6 billion in revenue, according to data firm FactSet.

UnitedHealth operates the nation’s largest health insurance company, UnitedHealthcare, which covers more than 49 million people in the United States. It also operates a large pharmacy benefits manager that operates prescription drugs and a growing business that provides care and provides technical support.

The company’s full-year profit, which had risen at an all-time high in nearly a decade, fell 36% to $14.4 billion in 2024. The bottom line was hit in part by costs associated with a massive cyber attack which hit their Change Healthcare business early in the year

UnitedHealth, based in Minnetonka, Minnesota, surprised Wall Street early last year by reporting skyrocketing medical costs in the final quarter of 2023. Weeks later, the company discovered the cyber attack, which disrupted business and added more than $2 billion in direct response costs.

So in early December, Thompson was fatally shot as he walked to the company’s annual investor meeting in midtown Manhattan. A 26-year-old suspect, Luigi Mangionefaces federal and state charges in connection with Thompson’s death.

Prosecutors have said Mangione, who was not a UnitedHealthcare customer, was carrying a notebook expressed hostility toward the health insurance industry and especially wealthy executives when he was arrested.

The shooting gave rise to a host of complaints about insurance companies. ONE survey completed a few weeks after the shooting, they found that most Americans believe that health insurance excesses, or denials of coverage, bear some responsibility for Thompson’s death.

Shares of UnitedHealth, part of the Dow Jones Industrial Average, sank after Thompson’s firing, down about 4% for the year.

The stock had risen so far in 2025 before falling about $8 to $535.23 shortly before markets opened Thursday.