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

By Tomi Kilgore

The charge is mostly noncash and a result of cumulative currency losses

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) 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.

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.

While financial terms of the deal were not disclosed, the company said it reached agreement with José Seripieri Filho on the sale of Amil, which includes Amil Insurance, Amil Integrated Care, Amil Dental and Amil Hospitals in Brazil.

"We believe this agreement will ensure ongoing success, working with a buyer who has the local knowledge and experience to continue the positive momentum of the business," UnitedHealth said in an emailed statement to MarketWatch.

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

-Tomi Kilgore

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12-29-23 0812ET

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