UnitedHealth shares fall down after surprise earnings miss, cut to prediction

* UnitedHealth shares drop by more than 20%, set for the biggest decline in over 26 years * Unitedhealth Lower Outlook Miss Miss Due to higher medical costs * Medicare benefit is the question of UnitedHealth’s expectations * Predictions associated with investors, the sector -wide sales (Riparna Roy and Bhanvi Satija) updated (Riparna Royp and Bhanvi Satija. sent, because they hoped that the US insurer would maintain his profit prospects for the expectation that the demand for medical services would be similar to 2024. UnitedHealth historically gave a conservative prediction, at least two investors said. “No one expected this level of a fog or cut,” says Kevin Gade, Bahl & Gaynor chief operating officer, who owns the share of UnitedHealth. UnitedHealth reported adjusted earnings of $ 7.20 per share, also under the expectation of $ 7.29 per share. The US health insurance industry has been struggling since mid-2023 with increased costs due to an increase in demand for health care services among Medicare plans supported by the government for older adults or individuals with disabilities. UnitedHealth said the cost of patient care in its Medicare benefit increased more than expected late in the quarter, led by doctor and outpatient services. The Optum Health Unit, which includes the prescription medicine plans it has for Medicare, also had the pressure of patients who needed more care and the ongoing effects of financing cuts for Medicare plans implemented under the Biden Administration. The company added more patients in its Optum business, a portion of plans that are no longer offered. These patients experienced a surprising lack of involvement last year, which led to 2025 payments from the government far below what the company would expect, Andrew Witty said at a conference after earnings. The refund figures reflect “not their actual health status,” Witty said. Patients seeking follow -up visits with specialists have also generated higher costs for the insurance business, says Tim Noel, CEO of UnitedHealthcare, the company’s insurance unit. Medicare plans for corporate groups serving pensioners, which usually pay more for services, have also reduced the use of their plans and left the company with patients with lower income. “We’ve never seen this dynamic before,” says Noel, referring that this pressure is related to the cutting of Medicare. UnitedHealth Group now expects 2025 to be adjusted profits per share between $ 26 and $ 26.50 per share, compared to the previous forecast of $ 29.50 to $ 30 per share. According to Lseg -data, analysts expected a $ 29.73 per share profit for 2025. The insurer’s shares rose almost 12% in the ten days before the results of Thursday. By almost noon it was trading 23% at $ 449. Peers in the industry have subsided, including Elevance, CVS Health, Cigna, Centene and Humana. They dropped between 1% and 7%, which put the sector on track to shed over $ 100 billion in valuation if the losses apply. Rival Elect, who reports his quarterly results on April 22, said on Thursday that he intends to confirm his annual profit forecast. Today’s comments will question predictions for every other health insurance peer group, TD Cowen analyst Ryan Langston said. Health insurance shares had a rough 2024, injured by lower government payments, increased medical costs and public setback against the sector after the murder of a UnitedHealth Insurance Unit, Brian Thompson, late last year. Thompson’s fatal shooting also unleashed a storm on social media of the patient’s dissatisfaction and dissatisfaction with the health insurance industry practices, which contributed the company’s misery. However, insurance shares have fared better in recent months, despite a market routes caused by rising concerns about President Donald Trump’s rates. “It was a stock that was a safe haven for so much under rates and policy uncertainty,” spade said. (Reporting by Bhanvi Satija and Sriparna Roy in Bengaluru, Amina Niasse in New York; Editing by Anil D’Ilva and Marguerita Choy) first published: 17 Apr 2025, 09:05 IST