UnitedHealth Slips Through $3.3B in Asset Sales to Secure Earnings Win
Desperate times call for creative accounting, and UnitedHealth Group didn’t disappoint. To keep its earnings streak alive in 2024, the company quietly sold $3.3B in business stakes to private equity giants just before year-end. Without this last-minute boost, UnitedHealth would have missed Wall Street’s estimates for the first time since 2008.
- UnitedHealth sold stakes in units like Epic Hearing to Warburg Pincus and senior fitness programs to KKR, with requirements to complete them by Dec. 31 and remain undisclosed.
- R. G. Associate’s Jack Ciesielski remarked, “If the company is manufacturing earnings by chopping up their furniture or selling their assets, that’s not exactly a great business model”.
Caught in a struggle: Despite the accounting wizardry, UnitedHealth’s shares are down 41% this year. The company withdrew its full-year guidance and missed Q1 estimates after the healthcare industry struggled to bounce back from the ballooning Medicare Advantage costs. Despite some optimism from Leerink Partners about the company’s market position and diversified healthcare capabilities, Raymond James analyst John Ransom slashed forecasts after discovering the “low-quality and non-recurring” earnings.
