Financial reset at UnitedHealth Group falls short of expectations

UnitedHealth Group’s big financial reset after unprecedented financial woes this spring isn’t thrilling investors.

The company’s stock fell 4% in pre-market trading as the Eden Prairie-based health care giant forecast adjusted earnings per share of just $16 this year.

The number fell short of analysts projections, which forecast a profit of $20.9 per share for 2025.

And it was far shy of the financial guidance that UnitedHealth Group suspended in May due in part to surprisingly high medical cost trends. The cancelled financial guidance had told investors to expect adjusted per-share earnings of $26 to $26.50.

The financial issues stemmed from results in UnitedHealth Group’s UnitedHealthcare division, the nation’s largest health insurer.

In the insurance business, the percentage of revenue spent on beneficiaries’ health care — a widely watched measure of insurer profitability — landed at 89.4% in the second quarter, higher than analysts had expected.

This “medical loss ratio” was 84.8% in the first quarter.

“The increase was primarily due to medical cost trends which significantly exceeded pricing trends, including both unit costs and the intensity of services delivered, and the ongoing effects of Medicare funding reductions,” the company said Tuesday morning in a statement.

The company and its industry have faced public outrage over insurance claims denials and payment delays following the December killing of UnitedHealthcare CEO Brian Thompson, who was fatally ambushed on a public sidewalk while walking to an investor conference in New York City.

UnitedHealth also is facing a federal investigation over its Medicare business, where the company has been dogged by allegations that it has manipulated billing codes to wrongly boost “risk adjustment” payments from the government.

In April, the company failed to beat analyst expectations for quarterly profit for the first time since 2008. And in May, with continued signs of financial stress, chief executive Andrew Witty stepped down, clearing the way for former CEO Stephen Hemsley to return as chief executive.

This is a developing story. Check back for updates.

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