By Dean Seal
UnitedHealth Group cut its guidance after reporting a surge in care activity in its Medicare Advantage businesses last quarter, sending shares sharply lower.
The healthcare company said Thursday that its full-year outlook also dimmed from unanticipated changes in member profiles at its Optum Health business that cut into planned 2025 reimbursements.
"UnitedHealth Group grew to serve more people more comprehensively but did not perform up to our expectations," Chief Executive Andrew Witty said.
The stock was down 19% at $474 in premarket trading. Shares had gained 16% year-to-date when the market closed Wednesday.
UnitedHealth is now guiding for earnings of $24.65 to $25.15 a share for the year, down from a prior view of $28.15 to $28.65, and adjusted earnings of $26 to $26.50 a share instead of $29.50 to $30 a share.
For the first three months of the year, the company posted a profit of $6.29 billion, or $6.85 a share, compared with a loss of $1.41 billion, or $1.53 a share, in the same quarter a year earlier.
Stripping out one-time items, adjusted earnings were $7.20 a share. Analysts polled by FactSet had been expecting $7.29 a share.
Revenue climbed 9.8% to $109.58 billion, below analyst projections for $111.58 billion, according to FactSet.
UnitedHealthcare, the company's insurance and managed care business, reported a 12% jump in revenue as the number of customers with self-funded commercial benefits increased by about 700,000.
The company's medical-care ratio, or the share of premiums spent on patient care, ticked up to 84.8% from 84.3% a year earlier from ongoing Medicare funding reductions and higher senior-care activity.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
April 17, 2025 06:39 ET (10:39 GMT)
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