UnitedHealth Group (UNH) has reported impressive fourth-quarter earnings, exceeding analysts’ expectations. The company’s earnings per share grew by a remarkable 15.4% to reach $6.16, while its revenue saw a significant increase of 14.1% to reach $94.4 billion.
Analysts predicted earnings per share of $5.98 and revenue of $92.1 billion for the fourth quarter, according to FactSet. Therefore, UnitedHealth Group’s financial performance surpassed these estimates, further demonstrating the company’s strength in the healthcare sector.
Despite the positive news, there were some concerns raised regarding UNH’s medical cost ratio in the fourth quarter. The ratio, which represents the percentage of premiums spent to cover members’ health needs, rose to 85, above analyst expectations. This increase was attributed to factors such as outpatient care and coverage in government programs.
In response to the earnings announcement, UNH stock suffered a 5.5% decline in early Friday stock market action. However, it is important to note that the stock had experienced a 0.4% climb on Thursday, surpassing its 50-day and 10-week moving averages.
It is worth mentioning that UNH stock has been moving sideways since April 2022, and its relative strength line has been declining since November 2022. Despite this recent decline, the stock remains on the IBD Long Term Leaders list for its consistent double-digit earnings growth and historical share-price outperformance.
Investors are advised to exercise caution in view of the stock’s recent decline. It is recommended to avoid jump into bargain-hunting on a fall below the 50-day moving average. Instead, investors are encouraged to stay informed by following IBD’s The Big Picture column for the latest stock market trend information.
Overall, UnitedHealth Group’s impressive performance in the fourth quarter reflects its strong position in the healthcare industry. Despite the stock’s recent decline, the company’s consistent growth and historical outperformance make it an attractive investment option for long-term investors.
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