MINNETONKA, Minn. – Managed-care provider UnitedHealth Group Inc. said Thursday its fourth-quarter profit fell 40 percent compared with last year, as it settled a lawsuit and dealt with rising expenses.
The insurer reported net income of $726 million, or 60 cents per share, compared with $1.22 billion, or 92 cents per share, from the same quarter last year. Revenue rose 9 percent to $20.45 billion from $18.71 billion.
UnitedHealth's profit included a charge of 18 cents per share to resolve a class-action lawsuit over out-of-network medical services. The insurer said last week it would pay $350 million to settle the litigation, which focused on pricing databases operated by its Ingenix subsidiary.
UnitedHealth's adjusted profit of 78 cents per share matched expectations of analysts polled by Thomson Reuters, and its revenue surpassed analyst expectations of $20.4 billion.
In the fourth quarter, UnitedHealth also recorded a charge of 3 cents per share for $50 million in venture-capital investment writedowns. It also saw medical expenses rise 11 percent to $15 billion. Operating costs shot up 29 percent to $3.5 billion.
Medical enrollment increased by 800,000 people to 26 million during the year.
For 2008, UnitedHealth's profit fell 36 percent to $2.98 billion, or $2.40 per share, from $4.65 billion, or $3.42 per share, in 2007. Full-year revenue rose 8 percent to $81.2 billion.
The company said it will maintain its outlook for 2009 earnings of $2.90 to $3.15 per share.
UnitedHealth shares closed at $25.05 in trading Wednesday, up more than 3 percent from the previous day.