(Bloomberg) — UnitedHealth Group Inc. (UNH) shares plunged the most in four years on Tuesday after the insurance giant lowered the top end of its 2024 forecast and issued 2025 guidance that missed analysts’ estimates.
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The company said it sees around $30 a share for the top end of its adjusted 2025 earnings outlook. Analysts were expecting $31.16 a share on average, according to a Bloomberg survey.
UnitedHealth shares fell as much as 10.3%, its biggest intraday decline since March 18, 2020.
The company has rarely disappointed investors with guidance that falls short of Wall Street’s view. Executives emphasized that the targets are preliminary and they aim to outperform them.
“We anticipate stepping out for 2025 more conservatively than is typical,” Chief Executive Officer Andrew Witty said on a call with investors, noting the company will give detailed guidance in December.
2024 Guidance
The midpoint of UnitedHealth’s new 2024 guidance fell below analysts’ average view. Adjusted profit will be $27.50 to $27.75 a share in 2024, a 25 cent drop from the prior top end of the range, the company said Tuesday.
The new outlook includes a bigger impact from a catastrophic hack of the company’s Change Healthcare division than UnitedHealth had previously forecast. Some costs for responding to the crisis were excluded from adjusted results.
UnitedHealth, the first of the group to report results, is seen as a bellwether for the sector. Its shares have increased 15% this year through Monday’s close. Rival insurers including Elevance Health Inc., Humana Inc. and Centene Corp. fell less than 1% in early trading after UnitedHealth announced results.
UnitedHealth’s adjusted 2024 third-quarter earnings were $7.15 a share, compared with analysts’ average estimate of $6.99. Quarterly revenue for the health-care giant was $100.8 billion, while analysts had estimated $99.2 billion.
The company’s medical-loss ratio, a crucial gauge of spending for patient care, was 85.2%, less favorable than Wall Street’s view. UnitedHealth cited pressure from Medicare, the US health program for the elderly.
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