UnitedHealth Group (NYSE: UNH) reported third-quarter 2024 results, reporting total revenues of $10.8 billion, up $8.5 billion from the same period last year. Overall growth was driven by an increase in the number of service providers served by Optum and UnitedHealthcare.
The company’s CEO, Andrew Witty, said in the earnings report, “Our continued growth is supported by innovative products and responsive service, supported daily across healthcare participants.” The company’s full-year net income forecast for FY2024 is $15.50 to $15.75 per share. This reflects the impact of divestiture activity in South America and the Change Healthcare cyberattack.
Adjusted net income guidance is in the range of $27.50 to $27.75 per share, which is consistent with guidance from the prior quarter. This is an increase of about $0.10 from the previous quarter’s estimate.
Overall Financial Results
Third-quarter revenues were $10.8 billion, up $8.5 billion from the same period last year. Operating income was $8.7 billion, including the impact of the cyber attacks. Adjusted operating income was $9.0 billion, which excludes the impact of the Change Healthcare business disruption. The medical expense ratio increased to 85.2%, up from 82.3% in the prior year. This was due to CMS Medicare funding cuts, changes in medical reserves, and the impact of business and member mix.
Payment claim days were 47.4 days, down from 50.7 days in the prior year period. This is due to normalization of claim submission patterns. Operating cost ratio was 13.2%, an improvement from 15.0% in the previous year. Operating cash flow was $14.0 billion, 2.2 times net income, impacted by the timing of cash receipts. More than $960 million was allocated to dividends and share buybacks beginning in early 2024 as a return to shareholders.
UnitedHealthcare Division
UnitedHealthcare’s third-quarter revenue was $74.9 billion, up $5 billion from the same period last year. The number of domestic consumers increased by 2.4 million to 29.7 million. Senior and complex needs users totaled 9.4 million, expected to reach 96% of eligible Medicare beneficiaries in 2025 Medicare Advantage plans. The number of individuals served by state-based community offerings increased to 7.5 million, driven by the completion of the Medicaid eligibility reaffirmation process.
Optum Division.
Optum’s third-quarter revenue was $63.9 billion, up $7.2 billion from the same period last year. Growth was driven by Optum Health and Optum Rx. Operating income reached $4.5 billion and adjusted operating income $4.8 billion. Optum Health revenue of $25.9 billion was driven by increased patient volume and expanded types and levels of care. Optum Rx revenue was $54.2 billion, driven by new customer acquisition and expansion of comprehensive pharmacy services.
SUMMARY
UnitedHealth Group delivered solid results in the third quarter with strong revenue growth and efficient management of operating costs. Despite some negative factors such as cyber attacks and business disruptions, the overall foundation for growth remained solid.