UnitedHealth Group (NYSE:UNH) on Thursday reported first-quarter 2025 earnings and revised 2025 guidance.
The insurance giant reported adjusted EPS of $7.20, up from $6.91 a year ago, missing the consensus of $7.29. Revenues increased 6.8% year over year to $109.6 billion, missing the consensus of $111.60 billion.
“UnitedHealth Group…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%,” said Andrew Witty, chief executive officer of UnitedHealth Group.
The first quarter medical care ratio was 84.8% compared to 84.3% in 2024.
- The increase was primarily due to the revenue effects of the ongoing Medicare funding reductions and member mix and the higher senior care activity, partially offset by the Medicare Part D program changes, which affected seasonality.
- The company did not reflect any favorable earnings impacting medical reserve development in the quarter.
UnitedHealthcare’s first-quarter revenues of $84.6 billion grew by $9.3 billion year over year. Operating earnings were $5.2 billion, impacted by higher-than-expected care activity levels within its Medicare Advantage business.
Optum’s first quarter revenues of $63.9 billion increased by $2.8 billion, led by Optum Rx. Operating earnings were $3.9 billion.
- Optum Health’s revenues were $25.3 billion, and it expects to serve 650,000 new value-based care patients in 2025.
- Optum Insight revenues were $4.6 billion and the revenue backlog was $32.9 billion.
- Optum Rx revenues were $35.1 billion, with strong growth driven by new clients and expanded relationships with existing clients. Adjusted scripts grew to 408 million, compared to 395 million last year.
Guidance: UnitedHealth Group cuts its 2025 performance outlook. It expects adjusted earnings of $26.00-$26.50 per share versus prior guidance of 29.50-$30.00 versus consensus of $29.73, reflecting:
Price Action: UNH stock is down 20.50% at $465 during the premarket session on the last check Thursday.
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