Shares of UnitedHealth Group (NYSE: UNH) plunged by more than 22% Thursday morning after the company reported underwhelming first-quarter earnings and revised its full-year outlook.
The health insurance giant lowered its 2025 earnings forecast, now projecting net earnings of $24.65 to $25.15 per share and adjusted earnings of $26.00 to $26.50 per share. This marks a downgrade from its January guidance, which anticipated net earnings between $28.15 and $28.65 per share and adjusted earnings in the range of $29.50 to $30.00 per share.
UnitedHealth Group grew to serve more people more comprehensively but did not perform up to our expectations, and we are aggressively addressing those challenges to position us well for the years ahead, and return to our long-term earnings growth rate target of 13 to 16%, CEO Andrew Witty said in a statement.
The outlook was a result of two factors, the company revealed.
First, UnitedHealthcares Medicare Advantage plans saw more people using medical services than expectedespecially visits to doctors and outpatient care. This increase was clear at the end of the quarter and was much higher than the company planned for 2025, although it was similar to high usage levels it saw in 2024.
On top of that, Optum Health, a division of UnitedHealth Group, had some unexpected changes in its patients. Some health plans left certain areas, and the people covered by those plans didnt use services much in 2024, which affected the planning for how much money would come in for 2025. Also, more patients than expected were “complex” cases, people with serious or multiple health issues, and were heavily affected by past cuts to Medicare funding.
The number of people served by the companys offerings for seniors and people with complex needs grew by 545,000 in the first quarter and remains expected to grow up to 800,000 in 2025, according to the report.
The company said these factors are highly addressable over the course of 2025 and it looks ahead to 2026.
Other insurance stocks are tumbling, too
The health insurance sector saw significant stock sell-offs following what appeared to be surprising financial troubles at industry leader UnitedHealth, according to the Wall Street Journal. Humana, for instance, saw an 8% decline. Elevance Health and CVS Health saw their stock prices fall about 6% each early Thursday morning.
UnitedHealth Group reported revenues of $109.6 billion, marking a $9.8 billion increase year-over-year, with first-quarter earnings from operations totaling $9.1 billion.
