Jul. 15 at 2:30 PM
$UNH just did a little financial magic to keep the streak alive
UNH has beaten earnings every quarter for the past 15 years. Sixty quarters in a row. But according to Bloomberg, that record almost broke and the company wasn’t about to let that happen without pulling a few tricks from the bag.
Turns out UNH quietly sold stakes in some of its own business units to Warburg Pincus &
$KKR, locking in
$3.3B in “profit” last year. Most of that showed up in Q4 conveniently when they needed a boost.
UNH agreed to buy those same stakes back later… at higher prices. But it did the job,of they beat Q4 earnings by just
$0.07 per share.
This reminds me what
$BUD did years ago when they sold an asian subsidiary to KKR for
$1.8bn just for management to get their bonuses and then bought the same assets back at
$4.5bn.
So yeah, UNH kept the streak going. But when companies start dressing up earnings like this, it’s worth asking: what’s really going on under the hood?
Always look past the headline EPS beat.
