UnitedHealth Group Shares Dive Sharply as Company Revises Down Full-Year Profit Projections

UnitedHealth Group (UNH) experienced a dramatic drop of over 22% in its stock price on Thursday, marking its steepest decline in more than 25 years. This downturn followed the release of first-quarter earnings that missed analyst expectations and a downward revision of the company’s profit outlook for 2025.

The Minnesota-based healthcare powerhouse reported adjusted earnings per share (EPS) of $7.20, with revenues climbing 10% year-over-year to $109.58 billion. These figures fell short of the anticipated $7.25 EPS and $111.46 billion in revenue forecasted by analysts surveyed by Visible Alpha.

In response, UnitedHealth lowered its 2025 EPS guidance to a range between $24.65 and $25.15, alongside an adjusted EPS forecast of $26 to $26.50. This contrasts with the previous quarter’s projections of full-year EPS between $28.15 and $28.65, and adjusted EPS from $29.50 to $30.

The company attributed the revised outlook to increased healthcare utilization trends within its Medicare Advantage segment and unexpected shifts in the Optum Health member profile, which have influenced reimbursement plans for 2025.

Industry experts highlight that rising medical expenses and reduced government reimbursements for Medicare Advantage claims are driving higher costs for insurers like UnitedHealth, according to reports from CNBC.

Thursday’s sell-off also impacted other major health insurers, including CVS Health (CVS), Humana (HUM), Elevance Health (ELV), and Centene (CNC), all affected by concerns over escalating costs.

CEO Acknowledges Performance Shortfall and Outlines Strategic Response

CEO Andrew Witty acknowledged the company’s underperformance, stating, "We did not meet our expectations and are taking decisive actions to address these challenges, positioning UnitedHealth for sustained success in the coming years."

Despite the recent setback, UnitedHealth shares had gained approximately 16% since the start of the year, rebounding from a February dip triggered by a Department of Justice investigation into the company's diagnostic practices.

Note: This article has been updated with the latest stock price data and expert analysis.

Explore useful articles in Company News as of 10-12-2024. The article titled " UnitedHealth Group Shares Dive Sharply as Company Revises Down Full-Year Profit Projections " offers in-depth analysis and practical advice in the Company News field. Each article is carefully crafted by experts to provide maximum value to readers.

The " UnitedHealth Group Shares Dive Sharply as Company Revises Down Full-Year Profit Projections " article expands your knowledge in Company News, keeps you informed about the latest developments, and helps you make well-informed decisions. Each article is based on unique content, ensuring originality and quality.