UnitedHealth falls short of second quarter expectations and offers weak outlook for 2025
UnitedHealth Group Inc. runs one of the nation's largest health insurance and pharmacy benefits management businesses. The Eden Prairie, Minnesota company also operates a growing Optum business that provides care and technology support. In May, the company withdrew its 2025 forecast due to higher-than-expected medical costs and CEO Andrew Witty departed the company abruptly. He was replaced by Chairman Stephen Hemsley, who was the UnitedHealth CEO for more than a decade until 2017. Hemsley promised had said in June that UnitedHealth would establish a prudent 2025 earnings outlook when it detailed second-quarter results. Hemsley also said then that the company had underestimated care activity and cost trends but improvements were being made.
In the second quarter, UnitedHealth reported adjusted earnings of $4.08 per share on $111.6 billion in revenue. Analysts expected earnings of $4.48 per share on $111.5 billion in revenue according to FactSet. UnitedHealth is normally the first health insurer to report earnings every quarter, but this summer it followed competitors like Elevance Health Inc. and Centene Corp. that have lowered their annual forecasts and delivered disappointing results. Several insurers say they have been hit by medical costs that are rising faster than expected.
Companies have seen a rise in expensive emergency rooms visits and growing prescription drug costs, especially from expensive cancer treatments and gene therapy. They've also seen a rise in behavioral health care, which includes the treatment of mental health conditions and substance use disorders. Shares slid about 4 percent before the opening bell Tuesday.
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