UnitedHealth falls short of second quarter expectations and offers weak outlook for 2025

UnitedHealth delivered disappointing second-quarter earnings and went conservative with its 2025 forecast as soaring medical costs continue to swamp insurers.

The health care giant said Tuesday expenses that have jumped beyond what it expected when it set coverage prices will continue to pressure its performance. But the company expects a return to earnings growth in 2026.

UnitedHealth now expects adjusted earnings of at least $16 per share in 2025 after withdrawing its previous forecast in May. It had started 2025 with expectations of making up to $30 per share.

For the full year, analysts forecast earnings of $20.64 per share, according to the data firm FactSet.

UnitedHealth Group Inc. runs one of the nation’s largest health insurance and pharmacy benefits management businesses. The Eden Prairie, Minnesota, company also operates a growing Optum business that provides care and technology support.

In May, the company withdrew its 2025 forecast due to higher-than-expected medical costs, and CEO Andrew Witty departed the company abruptly. He was replaced by Chairman Stephen Hemsley, who was the UnitedHealth CEO for more than a decade until 2017.

That came after the company took the rare step in April of cutting its forecast. That pushed UnitedHealth shares down $130 in its worst single-day performance in over 25 years.

Hemsley promised in June that UnitedHealth would establish a “prudent” 2025 earnings outlook when it detailed second-quarter results. He also said the company had underestimated care activity and cost trends, but improvements were being made.

In the second quarter, UnitedHealth reported adjusted earnings of $4.08 per share on $111.6 billion in total revenue. Analysts expected earnings of $4.48 per share on $111.5 billion in revenue, according to FactSet.

The company's profit fell 19% to $3.41 billion even as revenue rose 13%. Medical costs, the company's biggest operating expense, jumped 20% to $78.6 billion in the quarter.

UnitedHealth is normally the first insurer to report earnings every quarter. But this summer, it followed competitors like Elevance Health Inc. and Centene Corp. that have lowered their annual forecasts and delivered disappointing results.

Several insurers say they have been hit by medical costs that are growing faster than expected. Companies have seen a rise in expensive emergency rooms visits and growing prescription drug costs, especially from expensive cancer treatments and gene therapy.

They’ve also seen a rise in behavioral health care, which includes the treatment of mental health conditions and substance use disorders.

UnitedHealth shares slid about more than 3% to $272.30 before the opening bell Tuesday.

That price topped $630 last November to reach a new all-time high. But the stock has mostly shed value since December, when UnitedHealthcare CEO Brian Thompson was fatally shot in midtown Manhattan on his way to the company’s annual investor meeting.

Shares are down 44% so far this year. The Dow Jones Industrial Average, of which UnitedHealth is a member, has climbed 5%.