UnitedHealth Group Resets Earnings Projections Way Below Previous Expectations

UnitedHealth Group announced this morning that it had updated its 2025 outlook to adjusted earnings of $16 per share, well below projections of approximately $30 per share the company made in December and below what Wall Street analysts were expecting.

The company's stock price dipped in premarket trading and has slid 44% since the beginning of the year.

In a press release in advance of an 8 a.m. earnings call, the company said that the second-quarter consolidated medical-care ratio of 89.4% increased 430 basis points year-over-year. The increase was due to both unit costs and intensity of the services delivered, the press release said.

Second-quarter earnings from operations fell by almost 50%, from $4.0 billion in 2024 to $2.1 billion this year, the press release said. Similarly, second-quarter operating margins plummeted from 5.4% in 2024 to 2.4% this year.

Today’s news comes after the country’s largest managed care company by revenue suspended its financial outlook in May and brought back Stephen Hemsley as CEO after Andrew Witty stepped down. The head of its health insurance unit was shot and killed on a midtown Manhattan street on Dec. 4, 2024.

The company is also facing legal pressures. It acknowledged last week that it was complying with “formal criminal and civil requests” from the Department of Justice. The DOJ investigation came after investigative articles by The Wall Street Journal that reported on the company’s Medicare billing practices, which the newspaper said involved inflating diagnoses to receive higher payment. The company has defended its practices and criticized the Journal’s reporting for relying on incomplete data and “a predetermined narrative.”