Why did UNH's Q4 2024 earnings fall short of expectations?

UnitedHealth Group's (UNH) Q4 2024 earnings fell short of expectations due to several key factors:

1. **Revenue Miss**: UnitedHealth's revenue for the quarter was $100.8 billion, which missed the analysts' consensus estimate of $101.7 billion. This was primarily due to weaker-than-expected sales in the insurance division, UnitedHealthCare, which saw a rise of only 4.7% in revenue, reaching $74.1 billion. Although Optum, the company's division providing patient care and managing pharmacy benefits, reported a 9.4% increase in revenue, reaching $65.1 billion, the overlap in revenue between the two divisions likely contributed to the overall revenue falling short of expectations.
2. **Increased Medical Expenses**: The company's profit margin declined from 5.8% to 5.5% due to increases in medical expenses. The medical loss ratio, which is the percentage of premiums paid out for patient care, rose to 87.6%. These rising costs were a result of higher utilization trends and increased expenses related to the Change cyberattack.
3. **Cyberattack Impact**: The cyberattack on Change Healthcare, a subsidiary of UnitedHealth, had a significant impact on the company's operations and financial results. The costs associated with recovering from the cyberattack, along with the loss of revenue due to claims processing disruptions, contributed to the lower-than-expected earnings.

In summary, UnitedHealth's Q4 2024 earnings fell short of expectations due to a combination of revenue missing expectations, increased medical expenses, and the impact of the cyberattack on Change Healthcare.

|code|Ticker|Name|Date|Net Income|market_code|
|---|---|---|---|---|---|
|UNH|UNH.N|UnitedHealth Group|2024 Q1|-1.221E9|169|
|UNH|UNH.N|UnitedHealth Group|2024 Q2|4.421E9|169|
|UNH|UNH.N|UnitedHealth Group|2024 Q3|6.258E9|169|
|UNH|UNH.N|UnitedHealth Group|2024 Q4|5.784E9|169|