While investors love when one of their companies beats analyst estimates, it's not always the case that its stock rises in reaction. That was the case Friday with big health insurance company UnitedHealth (UNH +2.67%), whose share price closed more than 3% lower following the release of its latest quarterly results. That contrasted poorly with the S&P 500 index, which rose marginally on the day.
UnitedHealth posted growth in its fourth quarter, but...
For its final quarter of 2023, UnitedHealth booked revenue of $94.4 billion, 14% higher than in the same period of 2022. Non-GAAP (adjusted) net income also rose at nearly the same rate to land at just under $5.8 billion. On a per-share basis, the latter line item shook out to $6.16 per share.
Both results topped analyst expectations. On average, prognosticators tracking the stock were modeling slightly over $91.9 billion on the top line, and $5.99 per share for adjusted earnings.
While those figures were encouraging, investors were concerned about UnitedHealth's costs. As with the revenue and profitability numbers, costs for medical services were notably higher than analysts had anticipated, as significant numbers of policyholders opted for respiratory syncytial virus (RSV) vaccines and related serves. A rise in COVID-19 cases also contributed.
Maintaining current strategy
In its earnings release, UnitedHealth implied that it would keep on its current strategic course. It quoted CEO Andrew Witty as saying that "UnitedHealth Group enters 2024 well prepared to build on our efforts to improve patient care and consumer experiences broadly, and to continue delivering strong and balanced growth."
