Latest news with #UNH
Yahoo
2 hours ago
- Business
- Yahoo
UnitedHealth Q2 Earnings Miss Estimates on Increasing Medical Costs
UnitedHealth Group Inc. UNH reported second-quarter 2025 adjusted earnings per share (EPS) of $4.08, which missed the Zacks Consensus Estimate of $4.84. The bottom line declined 40% year over year. Revenues rose 12.9% year over year to $111.6 billion. The top line marginally beat the consensus mark by 0.1%. The weak quarterly earnings took a hit from elevated medical costs, partly offset by domestic commercial membership growth and strength witnessed in Optum Rx. UnitedHealth Group Incorporated Price, Consensus and EPS Surprise UnitedHealth Group Incorporated price-consensus-eps-surprise-chart | UnitedHealth Group Incorporated Quote Business Performance of UNH UnitedHealth's second-quarter premium of $87.9 billion increased from $76.9 billion a year ago and also beat the consensus mark by 0.8%. UNH's medical care ratio (MCR) was 89.4% in the second quarter, which deteriorated 430 bps from the year-ago period. The metric was higher than the Zacks Consensus Estimate of 88.6% and our estimate of 87%. MCR witnessed an increase due to the previously noted reductions in Medicare funding and medical cost trend, which exceeded the pricing trend. Medical costs of $78.6 billion rose from $65.5 billion a year ago. Second-quarter total operating costs of $106.5 billion escalated 17% year over year due to higher medical costs and the cost of products sold. The figure came higher than our model estimate of $103.8 billion. The second-quarter 2025 operating cost ratio improved to 12.3% from 13.3% in 2024 due to increased technological and other operating efficiencies and Part D programs. UnitedHealth's operating earnings declined 34.6% year over year to $5.2 billion in the second quarter. The net margin deteriorated 120 bps to 3.1% from the year-ago period. Performance of UNH's Business Platforms Revenues of the health benefits business of UnitedHealth, UnitedHealthcare, advanced 17% year over year to $86.1 billion in the second quarter due to an increase in domestic commercial membership growth. The metric beat the Zacks Consensus Estimate of $84.8 billion. Earnings from operations amounted to $2.1 billion, down from $4 billion a year ago. The operating margin decreased 300 bps year over year to 2.4%. Revenues in the Optum business line were $67.2 billion, which rose 6.8% year over year due to strong contributions from Optum Rx. However, the figure fell short of the consensus mark of $67.5 billion. Optum's earnings from operations declined to $3.1 billion from $3.9 billion a year ago. The operating margin of 4.6% decreased 160 bps year over year. UnitedHealth's Medical Membership The UnitedHealthcare business catered to 50.1 million people as of June 30, 2025, which grew 2.1% year over year due to its self-funded commercial benefits. However, the figure missed the Zacks Consensus Estimate of 50.3 million and also missed our estimate of 50.2 million. UNH's Financial Position (As of June 30, 2025) UnitedHealth exited the second quarter with cash and short-term investments of $32 billion, which rose from the 2024-end level of $29.1 billion. Total assets of $308.6 billion increased from the $298.3 billion figure at 2024-end. Long-term debt, less of current maturities, amounted to $73.5 billion, up from the $72.4 billion figure as of Dec. 31, 2024. Short-term borrowings and the current portion of long-term debt were $5.7 billion. Total equity of $100.5 billion advanced from the 2024-end level of $98.3 billion. UnitedHealth generated operating cash flows of $7.2 billion in the second quarter, which surged from the prior-year figure of $2.2 billion. UNH Capital Deployment Update UnitedHealth rewarded $4.5 billion to its shareholders in the form of share repurchases and dividends in the second quarter. In June, the company hiked the quarterly dividend rate by 5%. UNH's 2025 Outlook Management now projects adjusted net EPS to be at least $16 for 2025, down from the previous guided range of $26-$26.50 compared with the 2024 figure of $27.66. Net earnings are now expected to be at least $14.65 billion, up from the 2024 level of $14.4 billion. Revenues are now projected between $445.5 billion and $448 billion in 2025, up from $400.3 billion in 2024. Operating cash flows are now projected to be $16 billion, down from $24.2 billion in 2024. UNH's Zacks Rank & Key Picks UNH currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the Medical space are West Pharmaceutical Services Inc. WST, Fresenius Medical Care AG & Co. FMS and Doximity, Inc. DOCS, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here. The Zacks Consensus Estimate for West Pharmaceutical Services' current-year earnings of $6.61 per share has witnessed four upward revisions in the past seven days against no movement in the opposite direction. West Pharmaceutical Services beat earnings estimates in each of the trailing four quarters, with the average surprise being 16.8%. The consensus estimate for current-year revenues is pegged at $3 billion, indicating 4.6% year-over-year growth. The consensus estimate for Fresenius Medical Care's current-year earnings of $2.22 per share has witnessed four upward revisions in the past 60 days against no movement in the opposite direction. Fresenius Medical Care beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 6.6%. The consensus estimate for current-year revenues is pegged at $22 billion, indicating 5.2% year-over-year growth. The Zacks Consensus Estimate for Doximity's current-year earnings of $1.46 per share has witnessed one upward revision in the past 60 days against no movement in the opposite direction. Doximity beat earnings estimates in each of the trailing four quarters, with an average surprise being 29.9%. The consensus estimate for current-year revenues is pegged at $625.7 million, indicating 9.7% year-over-year growth. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report Fresenius Medical Care AG & Co. KGaA (FMS) : Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report Doximity, Inc. (DOCS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
4 hours ago
- Business
- Yahoo
UnitedHealth Group reports mixed second quarter earnings; stock down in premarket trading
UnitedHealth Group (UNH) reported second quarter earnings Tuesday, beating Wall Street's expectations on the top line by a small margin and missing on the bottom line. But its earnings continue a trend of higher-than-expected costs in the industry this quarter. The company reported revenues of $111.6 billion, compared to Wall Street expectations of $111.53 billion, and adjusted earnings per share (EPS) of $4.08, compared to $4.59 expected by the Street. Revenues are up nearly $13 billion year over year compared to the second quarter in 2024. But margins have shrunk from 4.3% in 2024 to 3.1% this quarter. The company also updated its guidance for the full year after pulling it last quarter. It now expects revenues between $445.5 and $448.0 billion and adjusted earnings of at least $16 per share. UnitedHealth's stock fell more than 5% in trading Tuesday. Read more: Live coverage of corporate earnings Industry pressure More patients seeking care means more premiums being paid out and less revenue for health insurers. Typically, insurers aim to be on the lower end of between 80% and 85% of the premiums they receive, known as the medical expense ratio. UnitedHealth reported 89.4% this quarter, compared to 84.8% in the first. That number is the highest in the company's history, breaking its 2024 record of 85.5%, which was attributed to higher utilization of care by seniors. Other insurers have reported 90% or more in the second quarter this year — a significant jump from prior quarters, and it's all related to Medicare or Medicaid programs. This marks a continuing trend that has been plaguing the industry since last year and has taken several stocks for a ride every quarter. Notably, CVS (CVS) saw a hit to its stock after its Aetna Medicare costs came in higher than expected, but then its stock was boosted last quarter as fears of costs were allayed. This quarter, Centene (CNC) and Elevance (ELV) have faced higher-than-expected costs. The hit to UnitedHealth on Tuesday appears to be a delayed part of that trend — and the company has acknowledged that it, like other big insurers, is surprised by the hit. Especially with the company's focus on revenue management, owning and acquiring companies over the years would rely on technology to streamline and increase profits. The result of the inaccurate cost assumptions will be felt by patients next year, as UnitedHealth announced it will exit several markets, impacting 600,000 patients. That's in the Medicare Advantage market alone. It also anticipates heavy losses in the Affordable Care Act marketplace, as enhanced subsidies from the pandemic expire. On top of which, premiums are likely to rise next year as the company looks to boost revenues and profits. Industry change In addition to the insurance market woes, UnitedHealth has faced internal struggles. Former CEO Andrew Witty was ousted in May. Former CEO and board chair Stephen Hemsley then took the helm. The executive shake-up came after a year of turmoil for the company, including the largest-ever cyberattack on its Change Healthcare subsidiary. Meanwhile, the company is still reeling from the death of insurance executive Brian Thompson, who was shot and killed in New York City last year. The incident prompted an awakening in the insurance industry, which faced a backlash for its system of prior authorization requirements that result in denials of care. Several companies and the Trump administration have pledged to fix the problems and relax prior authorization burdens for patients. Humana executives said last week during an earnings call that the company would reduce prior authorizations by one-third of the current volume. UnitedHealth previously said that it only sees prior authorizations for 2% of total claims and that it will further reduce that amount. UnitedHealth said Tuesday the company is focused on greater transparency with Hemsley leading and expects to continue offering greater insight into its operations as it rebuilds the company. 'UnitedHealth Group has embarked on a rigorous path back to being a high-performing company fully serving the health needs of individuals and society broadly,' CEO Stephen Hemsley said in a statement. 'As we strengthen operating disciplines, positioning us for growth in 2026 and beyond, the people at UnitedHealth Group will continue to support the millions of patients, physicians and customers who rely on us, guided by a culture of service and longstanding values.' Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, provider services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem.
Wall Street Journal
4 hours ago
- Business
- Wall Street Journal
UnitedHealth Faces Long Road to Recovery
For years, UnitedHealth's UNH -7.46%decrease; red down pointing triangle stock was one of the surest bets in healthcare, backed by dependable double-digit earnings growth and a reputation for flawless execution. But the halo that once made it a Wall Street darling—worth over half a trillion dollars at its peak in late 2024—is gone. Whether it can be restored anytime soon is now an open question.
Business Insider
7 hours ago
- Business
- Business Insider
UnitedHealth Stock (UNH) Faces Divided Analyst Opinions After Q2 Results
UnitedHealth Group (UNH) stock is down 5% on Tuesday after missing analyst estimates for Q2. However, the company reinstated full-year guidance and offered a clearer view of its outlook for 2025 and 2026. Following the release, several analysts offered mixed reactions to the earnings report, but they see potential for recovery in 2026. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Mizuho and Bernstein Analysts Remain Bullish Analyst Ann Hynes from Mizuho praised the company's transparency on 2025 and 2026 expectations. She noted that cost pressures are expected to continue, especially in Medicaid and Medicare Advantage, where expenses are rising faster than expected. The five-star analyst forecasts mid-single-digit growth in 2026 and possibly low double-digit growth in 2027. Overall, she maintained a Buy rating and $350 price target on UnitedHealth stock. Similarly, analyst Lance Wilkes from Bernstein said the company is working to rebuild investor confidence and reduce uncertainty. He believes UnitedHealth's strong market position will support a return to solid earnings growth, especially as trends in Medicare Advantage pricing and usage improve. For 2025, he sees EPS guidance between $20 and $21, and for 2026, possibly 15% growth, which could bring the company back to its long-term goal of 13% to 16% annual growth. Wilkes kept a Buy rating and $377 price target on the stock. BofA Analyst Lowers Price Target for UNH Stock Analyst Kevin Fischbeck from BofA Securities lowered the price target to $300 from $350 but kept a Hold rating. He noted that the company is focusing on better execution, but believes progress may be slower than expected. Fischbeck said that UnitedHealth was transparent about its segment margins and challenges, which helps investors understand the business better. However, he remains cautious as the company did not fully confirm its long-term growth target. Is UNH a Good Buy Right Now? average UnitedHealth stock price target implies a 30.46% upside potential.
The Market Online
17 hours ago
- Business
- The Market Online
@ the Bell: Earnings heat up as tariff deadline looms
Canada's main stock index climbed on Tuesday, supported by rising gold and energy prices. Investors also kept a close eye on corporate earnings and anticipated potential trade agreements with the US ahead of Friday's tariff deadline. It was a different story in the US, where markets sunk despite gains in the gold and energy markets, as investors evaluated earnings reports and awaited developments in trade negotiations. This week is also the peak of earnings season, with over 150 S&P 500 companies scheduled to release their results. However, shares of UnitedHealth (NYSE:UNH) declined almost 7 and a half per cent after the company issued a 2025 forecast that missed Wall Street expectations, citing continued pressure from elevated medical costs in its insurance division. The Canadian dollar traded for 72.57 cents US compared to 72.80 cents US on Monday. US crude futures traded US$2.73 higher at US$69.44 a barrel, and the Brent contract rose US$2.75 to US$72.79 a barrel. The price of gold was up US$12.73 to US$3,325.15. In world markets, the Nikkei was down 323.72 points to ¥40,674.55, the Hang Seng was down 37.68 points to HK$25,524.45, the FTSE was up 54.88 points to ₤9,136.32, and the DAX was up 247.01 points to €24,217.37. Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here .
