(Reuters) -UnitedHealth Group on Tuesday forecast 2024 profit below Wall Street expectations, indicating that medical costs are likely to remain elevated for the health insurance giant.
The largest U.S. health insurer’s forecast comes ahead of its investor day on Wednesday, where it is expected to provide its outlook on medical costs.
Focus will also be on the potential impact of biosimilars and newer GLP-1 drugs like Novo Nordisk’s Ozempic and Wegovy, and Eli Lilly’s Mounjaro and Zepbound, J.P. Morgan analyst Lisa Gill said in a note on Monday.
The healthcare sector has this year seen a recovery in demand, especially among older patients who started returning to doctors’ clinics and hospitals for procedures they had delayed during the pandemic.
UnitedHealth and other health insurers have seen an increase in costs in 2023 due to the recovery, although in October it said levels of elective surgeries in the third quarter were more “stable” than in the second.
UnitedHealth had said it expected the upper end of its fiscal 2024 profit forecast to be in line with Wall Street estimates. The comment has helped shares rise around 3% since Oct. 12.
However, it forecast 2024 adjusted profit of $27.50 to $28.00 per share, below the analysts’ average estimate of $27.90, sending its shares marginally down after the bell.
It forecast 2024 revenue in the range of $400 billion to $403 billion, higher than analysts’ estimate of $395.77 billion.
For 2023, the company estimates adjusted earnings per share in the range of $24.85 to $25.00 compared to expectations of $24.95.
(Reporting by Leroy Leo in Bengaluru; Editing by Maju Samuel and Arun Koyyur)
