UnitedHealth to book $7 billion charge due to deal to sell Brazil operations

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UnitedHealth Group Inc. disclosed Friday that it will book a charge of about $7 billion, following a deal to sell its Brazil operations to a private investor.

The health insurer said the charge is a result of cumulative losses from foreign currency translation.

UnitedHealth’s stock
UNH,
+0.40%
edged up 0.5% in light premarket trading. That gain wouldn’t be quite enough to turn the stock positive for the year, which means the stock is on track to suffer the first yearly loss since 2008.

The company said the charge, which is mostly noncash, will be booked when the deal to sell its Brazil operations closes, which is expected to occur in the first half of 2024. Financial terms of the deal, and the buyer, were not disclosed.

UnitedHealth said its 2024 net earnings outlook will be impacted as a result of the charge, but its adjusted earnings per share outlook remains unchanged at $27.50 to $28.

The current FactSet consensus for 2024 net earnings is $24.65 billion, while the adjusted EPS consensus is $27.90.

The stock has slipped 1% year to date through Thursday, while the Health Care Select Sector SPDR ETF
XLV,
+0.26%
has ticked up 0.3% and the Dow Jones Industrial Average
DJIA,
+0.14%
has gained 13.8%.



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