UnitedHealth Group posted stronger-than-expected earnings for the final quarter of 2024, but rising medical expenses and higher-than-anticipated care utilization rattled investors, sending shares lower on Thursday.
The results mark the company’s first quarterly report since the Dec. 4 killing of UnitedHealthcare CEO Brian Thompson, an incident that sparked widespread public discourse over access to health care and the power of insurance providers.
Company executives began Thursday’s earnings call with a tribute to Thompson, who was fatally shot outside a Manhattan hotel just before UnitedHealth’s annual investor meeting.
“Brian helped build this company and forged deep, trusted 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.
During the fourth quarter, the proportion of premium revenue used to cover patient care – known as the medical care ratio – rose to more than 87%, a level analysts had not anticipated, according to an Associated Press report. TD Cowen analyst Ryan Langston noted in a research note that this figure was “well above” projections.
UnitedHealth pointed to several continuing cost pressures, including greater use of high-cost specialty medications and ongoing reimbursement reductions in its Medicare Advantage business. The insurer also noted a decline of roughly 400,000 enrollees in Medicaid programs, amid slow updates from states on payment rates for remaining members.
Despite these headwinds, UnitedHealth reported adjusted earnings of $6.81 per share, topping Wall Street expectations of $6.73. However, revenue came in at $100.8 billion, missing analysts’ forecast of $101.6 billion, according to FactSet.
The Minnetonka, Minn.-based company operates the largest private health insurer in the US, covering more than 49 million individuals. It also owns a major pharmacy benefit management operation and is expanding into direct care delivery and health technology services.
For the full year, UnitedHealth’s net income fell 36% to $14.4 billion – its first annual profit decline in nearly a decade. The company cited the impact of a cyberattack on its Change Healthcare unit early in 2024, which resulted in over $2 billion in direct costs and widespread operational disruption.
UnitedHealth previously shocked the market in late 2023 with an unexpected spike in medical expenses. The discovery of the cyberattack followed just weeks later.
The shooting of Thompson in December led to renewed scrutiny of the health insurance industry. Federal and state authorities have charged 26-year-old Luigi Mangione in connection with the attack. A recent survey conducted in the weeks after Thompson’s death found that many Americans attributed some level of blame to insurers, citing issues like coverage denials and industry profits.
UnitedHealth shares, which are part of the Dow Jones Industrial Average, had recovered somewhat in early 2025 but dropped nearly 5% to $517.76 Thursday morning. Stocks of other health care giants, including CVS Health and Cigna, also saw declines.
