UnitedHealth missed first-quarter earnings views and slashed full-year guidance early Thursday, citing Medicare costs that were "far above" expectations and expected to stay high. UnitedHealth stock plummeted, with peers such as Humana, CVS Health and more tumbling as well.
The Dow Jones health insurance giant reported first-quarter earnings of $7.20 a share on revenue of $109.58 billion, up 4% and 10% vs. a year earlier respectively. Analysts had expected UnitedHealth earnings of $7.30 a share on sales of $111.5 billion.
"Heightened care activity indications within UnitedHealthcare's Medicare Advantage businesses, which became visible as the quarter closed, far above the planned 2025 increase which was consistent with the elevated levels in 2024," UnitedHealth said in the earnings release. "This activity was most notable within physician and outpatient services."
The medical cost ratio, a key metric, rose to 84.8% from 84.3%.
UnitedHealth now sees adjusted full-year earnings of $26-$26.50 a share vs. its prior target of $29.50-$30.
UnitedHealth Stock
UnitedHealth stock crashed 22.4%, gapping below the 50-day and 200-day lines to a 52-week closing low. UNH stock had been setting up after recently spiking on higher-than-expected Medicare Advantage payments for 2026.
Humana stock sold off 7.4%, but off intraday lows. Humana is the health insurer most exposed to Medicare Advantage.
CVS Health stock sank 1.8%, also paring losses. Cigna edged up 0.2%.
Elevance Health gave up 2.4% and Centene 2.1%.
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