(Reuters) – UnitedHealth’s fourth-quarter revenue fell short of Wall Street estimates of weakness in its health insurance business, and the company also reported higher-than-expected annual medical costs, sending its shares down nearly 5% before the bell on Thursday .
The company’s results come a month after Brian Thompson, chief executive of UnitedHealth’s (NYSE: ) insurance unit, was killed, sparking a conversation about the frustrations of running America’s health insurance system.
UnitedHealth’s annual medical expense ratio — the percentage of premiums spent on medical care — rose to 85.5%, compared with 83.2% in 2023. Analysts had expected a ratio of 84.96%, according to data compiled by LSEG.
Companies typically aim for a ratio closer to about 80%, but the industry has been struggling for nearly two years with increased costs due to high demand for health care services under government-backed Medicare plans for the elderly.
Shares of insurers CVS Health (NYSE: ) and Elevance Health also fell more than 3% in premarket trading.
Industry leader UnitedHealth faced a number of challenges throughout 2024, including a cyberattack on its technology division and steadily increasing medical costs.
UnitedHealth reported premium income of $76.48 billion for the fourth quarter ended Dec. 31, compared with estimates of $78.06 billion.
Total revenue for the quarter was $100.81 billion, missing expectations of $101.76 billion.
Revenue at Optum’s health services division, which includes the pharmaceutical business OptumRx, rose 9% to $65.1 billion.
On an adjusted basis, UnitedHealth earned $6.81 per share in the fourth quarter, compared to estimates of $6.72 per share.
The company reaffirmed its adjusted 2025 earnings forecast of $29.50 to $30.00 per share, which it originally provided in December.
