Latest news with #Stephen Hemsley
Reuters
2 days ago
- Business
- Reuters
UnitedHealth's downbeat annual forecast, quarterly profit miss hit shares
July 29 (Reuters) - UnitedHealth (UNH.N), opens new tab on Tuesday restored its full-year profit forecast that it suspended months ago, with a new outlook that highlighted the challenges the U.S. insurer faced, including rising medical costs. The company projected full-year earnings per share of at least $16, well short of analysts' lowered estimates, while second-quarter profit fell short of expectations. Its shares were trading about 5% down premarket, set to add to the more than 40% slump this year. UnitedHealth and other insurers have been hit hard this year by elevated medical costs. The company's underperformance led to the abrupt departure of CEO Andrew Witty in May. New CEO Stephen Hemsley is under pressure to regain investor trust amid company's financial issues and reputational damage. The company posted its first earnings miss in over a decade in the first quarter and is facing criminal and civil investigation by the U.S. Department of Justice over its Medicare Advantage billing practices. Morningstar analyst Julie Utterback said given the new outlook is roughly half of UnitedHealth's initial guidance for 2025, investors will be looking at management to allay fears over the longer-term earnings power of the business. UnitedHealth in December had initially forecast adjusted profit for 2025 to be between $29.50 and $30.00 per share. In 2024, its adjusted profit stood at $27.66 per share. The company said its new forecast reflects expectations for higher realized and anticipated care trends. The company suspended its 2025 forecast in May, a historic first for the insurer, citing higher-than-anticipated medical expenditures, which have also rattled its peers. The company's quarterly medical loss ratio - the percentage of premiums spent on medical care - stood at 89.4%, higher than analysts' expectation of 88.58%. The rise was mainly due to medical cost trends that significantly exceeded pricing trends, and the ongoing effects of Medicare funding reductions, UnitedHealth said. Still, the company remained optimistic and reiterated that it expects to return to profit growth in 2026. "While we face challenges across our lines of business, we believe we can resolve these issues and recapture our earnings growth potential," said Tim Noel, chief executive officer of the health insurance unit UnitedHealthcare. The company's adjusted second-quarter profit of $4.08 per share missed analysts' average estimate of $4.48.
Reuters
2 days ago
- Business
- Reuters
UnitedHealth forecasts annual profit below estimates
July 29 (Reuters) - UnitedHealth on Tuesday reinstated full-year profit forecast that it pulled over two months ago, but its guidance fell short of analysts' already-lowered expectations, as the U.S. health insurer battles rising costs in its government-backed plans. The company (UNH.N), opens new tab, which has seen a series of setbacks this year, also missed Wall Street expectations for second-quarter earnings. The results show the scale of the challenges UnitedHealth's new CEO Stephen Hemsley is facing after being restored to the role in May following the abrupt resignation of incumbent Andrew Witty. Its shares fell 5% in premarket trading after the company said its new forecast reflects expectations for higher realized and anticipated care trends. UnitedHealth suspended its 2025 forecast in May, a historic first for the insurer, citing higher-than-anticipated medical expenditures, which have also rattled its peers. The company on Tuesday forecast annual profit of at least $16 per share, lower than its previous expectation of $26 to $26.50 per share. Analysts on average were expecting a profit of $20.91 per share, per LSEG data. The healthcare conglomerate reiterated that it expects to return to earnings growth in 2026. The company's adjusted second-quarter profit of $4.08 per share missed analysts' average estimate of $4.48.
