UnitedHealth forecasts 2025 profit below Street estimates, shares fall

UnitedHealth Group provided a 2025 profit forecast below Wall Street estimates on Tuesday, saying it expects pressure across its government-supported health insurance businesses, and its shares fell 9%.

The largest U.S. health insurer forecast a profit of as much as $30 per share. That upper end was below analysts’ estimates of $31.18 per share, according to LSEG data.

CEO Andrew Witty said the company was setting next year’s forecast “more conservatively than is typical” due in part to cuts in payments from the government for Medicare plans and low state payment rates for Medicaid plans for low-income people.

The insurance bellwether’s comments also dragged shares of rivals CVS Health, Elevance and Humana down 3% to 5%.

UnitedHealth’s third-quarter medical costs also exceeded Wall Street estimates as the insurer paid out more due to persistently high demand for healthcare services while receiving lower reimbursements on government-backed plans.

Demand for healthcare services under the government’s Medicare plans for people aged 65 years and older or those with disabilities has surged since late last year as many older adults opted for procedures they had delayed during the COVID-19 pandemic.

The company also trimmed the higher end of its 2024 adjusted profit forecast by 25 cents to $27.75 per share.

The cut was partially due to a hit of 10 cents per share related to the February cyberattack on UnitedHealth’s technology unit, Change. The company now sees a business disruption impact of $705 million, or 75 cents a share, this year from the hack that caused massive payment and other disruptions across the United States.

Despite the rise in medical costs, UnitedHealth beat Wall Street estimates for adjusted profit by 15 cents due to increased memberships across its businesses.