UnitedHealth stock craters as CEO calls disappointing results 'unusual and unacceptable'

UnitedHealth (UNH) stock cratered as much as 19% Thursday after its first quarter earnings missed expectations and the company cut its full-year profit guidance, dragging down the blue chip Dow Jones Industrial Average (^DJI).

The health insurance giant now expects adjusted full-year profits fall in a range between $26 and $26.50 per share, down from its prior forecast for adjusted EPS to come in between $29.50 and $30.

The company cut its forecast to account for higher-than-anticipated costs related to its Medicare Advantage business, which offers private supplemental plans to Medicare recipients.

United Health for its first quarter reported adjusted earnings per share of $7.27 versus the $7.27 expected and revenue of $109.6 billion versus the $111.6 billion expected, according to Bloomberg consensus estimates.

In a statement, UnitedHealth CEO Andrew Witty said the company "did not perform up to our expectations, and we are aggressively addressing those challenges to position us well for the years ahead."

UnitedHealth said activity in its Medicare Advantage business was "far above" the increase planned for this year and consistent with levels seen in 2024.

Last year, the company reported a medical care ratio — or the amount of premiums collected that were paid out as medical costs — of 85.5%, up sharply from 83.2% the prior year.

United said in its annual report that this ratio was driven higher "as a result of the revenue effects of the Medicare funding reductions," among other factors.

Witty called the results " unusual and unacceptable" in an earnings call with analysts Thursday morning.

The company also said changes in its Optum Health membership and "a greater-than-expected impact to current and new complex patients from the ongoing Medicare funding reductions enacted by the previous administration" will weigh on profits in 2025.

" While we are decidedly unsatisfied with these results, our growth and foundation for improvement remains solid," Witty said.

This story will be updated.

Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.

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