Latest news with #UnitedHealth
Business Insider
5 hours ago
- Business
- Business Insider
UnitedHealth Stock (UNH) Down as $3.3B Secret Sales Raise Eyebrows
UnitedHealth Group (UNH) is facing questions about how it maintained its streak of over 60 consecutive quarterly earnings beats. According to a Bloomberg report, the healthcare giant quietly sold stakes in some business units to firms like Warburg Pincus and KKR (KKR), generating $3.3 billion in profit that helped it beat Q424 estimates. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. UNH stock was down over 2% during Tuesday's regular trading session as investors reacted to the company's accounting move and looked ahead to its Q225 earnings report on July 29. The Deals That Boosted Profits At the end of 2024, UnitedHealth was facing rising medical costs and regulatory pressures that were hurting profits. The company then offset this by making the last-minute asset sales to private equity firms. Without the asset sales, UNH would have missed earnings for the first time in over 15 years. Thus, UNH added the gains to its adjusted earnings, which helped it report adjusted EPS of $6.81 in Q4 and beat the forecast by $0.07. UNH's Unusual Accounting Practices It must be noted that UNH left out a $7.1 billion loss from its Brazil exit, calling it a one-time event, but included the $3.3 billion gain from U.S. asset sales in its core earnings. Analysts say that's allowed under U.S. rules, though some called it 'unusual' and said the earnings were low-quality and non-recurring. This new finding adds to the growing list of challenges UnitedHealth is already facing. The company is under criminal investigation by the DOJ for alleged Medicare billing irregularities. In May, CEO Andrew Witty abruptly resigned, replaced by former CEO Stephen Hemsley, to lead the company as it deals with growing regulatory pressure. Is UNH a Good Buy Right Now? Turning to Wall Street, UNH stock has a Moderate Buy consensus rating based on 18 Buys, seven Holds, and one Sell assigned in the last three months. At $357.14, the average UnitedHealth stock price target implies a 21.54% upside potential.
The Verge
15 hours ago
- Business
- The Verge
UnitedHealth is keeping tabs on its critics.
UnitedHealth is keeping tabs on its critics. What do a filmmaker in Wisconsin, billionaire investor Bill Ackman, The Guardian, and a doctor who posted on TikTok all have in common? UnitedHealth has targeted them in an effort to clamp down on criticism. The company's legal tactics have only intensified after the murder of UnitedHealthcare CEO Brian Thompson, The New York Times reports.
Yahoo
16 hours ago
- Business
- Yahoo
UnitedHealth's Quiet Profit Boost Under The Scanner
According to Bloomberg, UnitedHealth (NYSE:UNH) quietly sold stakes in its business units to generate an extra $3.3 billion in profit last year, preserving its 60-quarter streak of earnings beats, padding profits in the process. The insurer struck deals with private equity firms like Warburg Pincus and KKR that included clauses to buy back those stakes at a premium. Most of the gains showed up in the fourth quarter and slipped into its annual report with little fanfare. Warning! GuruFocus has detected 8 Warning Signs with KKR. That maneuver helped offset rising medical costs and prevented UnitedHealth from missing its first quarterly beat in over 15 years. It also highlights the lengths companies will go to meet Wall Street's expectations. Investors and regulators will be watching UnitedHealth's next results closely to see if this becomes a regular play or draws tougher scrutiny. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
17 hours ago
- Business
- Miami Herald
UnitedHealth's shocking move to please Wall Street
UnitedHealth (UNH) has stumbled through what has been a testing year. Sliding sales, a gloomy cost forecast, and a surprise profit cut rattled its investors early on. Don't miss the move: Subscribe to TheStreet's free daily newsletter Legal scrutiny added to the fire, along with a CEO scrambling to restore confidence. However, just as we thought we had seen the stock's worst, it has reportedly pulled off a quiet financial move that could prove to be the most shocking of them all. Image source: Alcorn/Bloomberg via Getty Images UnitedHealth kicked off the year with a stark warning. In early January, management told investors to brace for rising medical costs, forecasting a medical care ratio north of 86%, compared to the 85% Wall Street had priced in. Then came the major gut punch in April. UnitedHealth cut its full-year profit forecast from roughly $30 per share to a range of $26 to $26.50. The medical insurance giant blamed unexpected service and care costs, in what was the sharpest guidance cut it had posted since early pandemic turbulence. Related: One Washington move could shake Big Pharma to its core The timing and size of the drop posed serious questions over the sustainability of UnitedHealth's numbers and whether cost pressures were bleeding from the books. Things only got worse. In May, news broke that the Justice Department launched a criminal investigation into Medicare Advantage billing practices. UnitedHealth, which has been no stranger to regulatory scrutiny, was suddenly in the DOJ's crosshairs for potential fraud related to its coding systems. By June, the newly reinstalled CEO, Stephen Hemsley, was doing a lot of the cleanup. He addressed shareholders directly, vowing to "earn back your trust." Consequently, as of mid-July, UnitedHealth stock has tanked over 40% year-to-date. Over the past six months alone, the stock has nosedived 46%. Mr. Market almost missed UnitedHealth's quiet financial moves. According to Bloomberg, in protecting its impressive 60-quarter earnings beat streak, the company resorted to an accounting twist that's now raising eyebrows. UnitedHealth quietly sold stakes in multiple of its business units, generating $3.3 billion in profit, mostly in the back end of last year. These weren't traditional divestitures. The deals, struck with firms like Warburg Pincus and KKR, reportedly included buyback clauses. UnitedHealth therefore has the right (or obligation) to repurchase the same assets at higher prices down the line. Related: JPMorgan reveals 9 stocks with major problems That kind of structure isn't new to private equity circles, but the timing, terms, and secrecy are what's turning heads. People familiar with the transactions say UnitedHealth looked to push those deals to close by December 31, explicitly asking for them not to be publicized. That's prompted speculation over sales engineering, in part, to ensure the businesses didn't break their decades-long earnings streak. In January, UnitedHealth barely beat Q4 expectations. The company topped forecasts by seven cents, even as its medical care ratio rose, signaling higher health care expenses. On its Q4 call and in its annual report, UnitedHealth talked about improving operating costs while noting a $3.3 billion gain. However, it didn't say what was sold or how the profits were booked. More Stock News: Elon Musk's xAI is already shockingly massiveBank of America drops shocking call on Super Micro stockCathie Wood drops bold message on Apple, Tesla stock That detail flew under Wall Street's radar at the time. However, the latest scoop suggests that UnitedHealth may have posted its first earnings miss in more than 15 years, if it wasn't for the last-minute financial engineering. To be fair, UnitedHealth isn't new to profit‑padding allegations. As mentioned earlier, it's already in hot water with the Justice Department's fraud unit for allegedly inflating Medicare Advantage reimbursements through aggressive diagnosis coding, Going further back, it weathered an SEC probe in 2006 over backdated stock options, which eventually led to a massive $350 million settlement and the resignation of then‑CEO William McGuire. Related: Google Brain founder has an unexpected one-word message on AI The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
17 hours ago
- Business
- Yahoo
UnitedHealth's Quiet Profit Boost Under The Scanner
According to Bloomberg, UnitedHealth (NYSE:UNH) quietly sold stakes in its business units to generate an extra $3.3 billion in profit last year, preserving its 60-quarter streak of earnings beats, padding profits in the process. The insurer struck deals with private equity firms like Warburg Pincus and KKR that included clauses to buy back those stakes at a premium. Most of the gains showed up in the fourth quarter and slipped into its annual report with little fanfare. Warning! GuruFocus has detected 8 Warning Signs with KKR. That maneuver helped offset rising medical costs and prevented UnitedHealth from missing its first quarterly beat in over 15 years. It also highlights the lengths companies will go to meet Wall Street's expectations. Investors and regulators will be watching UnitedHealth's next results closely to see if this becomes a regular play or draws tougher scrutiny. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
