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UnitedHealth Group turned in a better-than-expected fourth quarter even as medical costs soared 16% for the health care giant.
Shares of UnitedHealth and other major health care and insurance providers slipped in early trading Friday after the company announced results. UnitedHealth is the first to report earnings every quarter, and many analysts see it as a bellwether for rivals.
UnitedHealth said medical costs, its largest expense, jumped to $62.23 billion in the quarter from $53.6 billion at the end of 2022. The company has dealt with rising costs in recent quarters, particularly in its Medicare Advantage business.
Overall, UnitedHealth’s profit climbed nearly 15% to about $5.5 billion in the quarter, and the company earned more than $22 billion on the year.
Earnings adjusted for one-time items totaled $6.16 per share in the fourth quarter, as revenue climbed 14% to $94.43 billion.
Analysts expected earnings of $5.98 per share on $92.13 billion in revenue in the final quarter of 2023, according to FactSet.
UnitedHealth provides health insurance for more than 47 million people in the United States. It also provides care, pharmacy benefits management and technology services through its Optum segment.
The company also reaffirmed its expectations for 2024, which it laid out in late November. UnitedHealth expects adjusted earnings ranging between $27.50 and $28 per share in the new year.
Analysts forecast earnings of $27.87 per share.
Shares of Minnetonka, Minnesota-based UnitedHealth Group Inc. dropped nearly 5%, or $26.23, to $513.45 in premarket trading.
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