UnitedHealthcare signage is displayed on an office building in Phoenix, Arizona, on July 19, 2023.
Patrick T. Fallon | Afp | Getty Images
UnitedHealth Group on Tuesday issued a 2025 outlook that fell short of Wall Street’s expectations, as the company’s insurance unit continues to grapple with higher medical costs.
The company anticipates it will post 2025 adjusted earnings of at least $16 per share, with revenue of $445.5 billion to $448 billion. Wall Street analysts had expected 2025 adjusted profit of $20.91 per share, and full-year revenue of $449.16 billion, according to consensus estimates from LSEG.
Shares of UnitedHealth Group fell more than 3% in premarket trading on Tuesday.
The report adds to a growing string of setbacks for the company, which owns the nation’s largest and most powerful insurer, UnitedHealthcare, and is often viewed as the industry’s bellwether. The stock tumbled in May after the company suspended its 2025 guidance due to higher medical costs and announced the abrupt departure of former CEO Andrew Witty.
UnitedHealth Group’s report signals that elevated medical costs in Medicare Advantage plans may not ease anytime soon for the broader health insurance industry. UnitedHealthcare, the insurance arm of UnitedHealth Group, is the nation’s largest provider of those privately run Medicare plans.
Higher expenses in Medicare Advantage plans have dogged insurers over the past year as more seniors return to hospitals to undergo procedures they had delayed during the Covid-19 pandemic, such as joint and hip replacements.
Here’s what UnitedHealth Group reported for the second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: $4.08 adjusted vs. $4.48 expected
- Revenue: $111.62 billion vs. $111.52 billion expected
Notably, the report comes just days after UnitedHealth revealed it is complying with Department of Justice investigations into its Medicare billing practices.
It marks UnitedHealth’s first earnings report under new CEO, Stephen Hemsley, who is tasked with restoring investor confidence and turning around a struggling company that has continued to draw heavy public scrutiny in recent months. Shares of UnitedHealth Group are down more than 44% for the year, fueled in part by the DOJ’s investigations and its suspended outlook.
The company’s 2024 wasn’t any better. It grappled with the murder of UnitedHealthcare’s CEO, Brian Thompson, the torrent of public blowback that followed and a historic cyberattack that affected millions of Americans.
