Total revenue climbed 11% to $28.77 billion, but medical costs grew 12% to $20.8 billion.
The insurer normally trumps Wall Street earnings expectations, but this performance matched average analyst forecasts. Analysts expected earnings of $1.20 per share on $28.23 billion in revenue, according to FactSet.
Health insurance is UnitedHealth's largest business, but it also operates segments that sell information technology services and pharmacy benefits management. UnitedHealth also is the largest provider of Medicare Advantage plans, which are privately run versions of the government's Medicare program for the elderly and disabled people.
UnitedHealth's operating costs climbed 13% to $4.85 billion in the quarter. It also recorded a smaller gain, compared to the 2011 quarter, of $140 million because claims left over from earlier periods coming in lower than expected, which allowed it to release money held in reserve. That compares with a $310 million gain in the final quarter of 2011.
The insurer said operating costs climbed mainly because it decided to bring some pharmacy benefits management business it used to give to an outside company in-house and because it was preparing to start a new contract to cover military members and their families through the government's Tricare program.
UnitedHealth said in October that it would spend about $4.9 billion to buy a majority stake in Brazilian health benefits and care provider Amil Participacoes SA. The company is the largest health insurer in Brazil and also owns hospitals and clinics.
The insurer's enrollment jumped 18% in the quarter to 40.9 million people, compared to the 2011 quarter. That was largely due to the addition of the Brazilian business.
For the full year, UnitedHealth earned $5.53 billion, or $5.28 per share, on $110.62 billion in revenue.
The company said it still expects 2013 earnings to range between $5.25 and $5.50 per share on $123 billion to $124 billion in revenue.
Analysts expect, on average, earnings of $5.56 per share on about $122.1 billion in revenue.
UnitedHealth is the first insurer to report earnings every quarter, and many see it as a bellwether for the sector. WellPoint Inc. will be the next major insurer to report on its fourth quarter when it releases results Jan. 23.
UnitedHealth shares rose 19 cents to $53.86 in midday trading, while the Dow Jones industrial average — of which UnitedHealth is a component — also climbed less than 1%.
Last year, UnitedHealth shares were up 7% to close 2012 at $54.24.