UnitedHealth reportedly leaned on stealth transactions to continue earnings momentum

With a streak of 60 consecutive quarterly earnings beats under threat, UnitedHealth (NYSE:UNH) resorted to discreet sales of ownership stakes in its business units to record an additional $3.3B of annual profit last year, mostly in Q4, Bloomberg News reported on Tuesday, citing people familiar with the matter.

The transactions, which involved companies such as private equity firms Warburg Pincus and KKR (KKR), included deals that required the managed care giant to buy back the divestments at a higher price after several years, the people noted.

Amid UnitedHealth’s (NYSE:UNH) insistence that those deals should be completed by Dec. 31 and shouldn’t be publicized even after they are closed, those conditions implied to people familiar with the transactions that the company is leveraging the sales to meet its earnings targets.

UNH hinted at the transactions in its Q4 financial report and analyst call early this year, noting that they improved operating costs. UnitedHealth (NYSE:UNH) also reported a $3.3B profit in its annual report, released in February, although the company didn’t disclose what it sold.

The gains, the details of which went largely unnoticed on Wall Street at the time, helped the company avoid what could have been a potential quarterly earnings miss for the first time in over 15 years in Q4 2024, according to the report.

In January, the Minnetonka, Minnesota-based healthcare giant exceeded Street forecasts for Q4 earnings by $0.07 per share despite rising medical expenses, as indicated by the medical care ratio.