UnitedHealth Group is a top U.S. company in health insurance and healthcare services. It began in 1974 as CharterMed. The company rebranded to UnitedHealth in 1998. Headquarters are in Minnetonka, Minnesota.
UnitedHealth has two main divisions: UnitedHealthcare and Optum. UnitedHealthcare provides health insurance. Optum offers healthcare services. In 2023, UnitedHealth had about $371.6 billion in revenue. It is the largest healthcare company by revenue. Globally, it ranks ninth in revenue. UnitedHealth employs around 440,000 people. The company’s mission is to promote health, prevent gaps in care, and offer comprehensive solutions.
United Health Fiscal Q1 2025
UnitedHealth Group (UNH) shared its first-quarter 2025 results, showing adjusted earnings of $7.20 per share, lower than expected.
The company made $109.6 billion in revenue, which grew by $9.8 billion compared to last year but also missed estimates.
UnitedHealthcare gained 780,000 new customers this year, and Optum Health plans to add 650,000 more value-based care patients in 2025.
Highlights:
- First-quarter 2025 revenues reached $109.6 billion, growing $9.8 billion year-over-year.
- Earnings from operations were $9.1 billion, with a return on equity of 26.8%.
- Medical care ratio increased to 84.8%, while operating cost ratio improved to 12.4% due to efficiency gains.
- The company returned $5 billion to shareholders through dividends and share repurchases.
- Challenges are seen as addressable, and UnitedHealth remains optimistic for 2026.
Outlook
The company also updated its full-year earnings forecast to $24.65 to $25.15 per share, with adjusted earnings expected to be between $26 and $26.50 per share.
Key reasons for revision include unexpected high care activity in Medicare Advantage and changes in Optum Health member profiles.
Board Statements
CEO Andrew Witty the chief executive officer of UnitedHealth Group, acknowledged that while the company expanded its services to reach a larger population, its performance did not meet expectations, with both revenue and earnings per share (EPS) falling short of estimates. He emphasized that the organization is actively addressing these challenges to strengthen its position and achieve its long-term earnings growth target of 13 to 16%.
Impact on the Market
UnitedHealth Group’s shares dropped by over 20% because its earnings fell short of expectations, and it reduced its 2025 adjusted earnings forecast.
The main reason for the drop was higher-than-expected medical costs in its Medicare Advantage business, especially from patients needing doctor and hospital services.
This news also affected other insurers, causing Elevance’s shares to drop by 10% and Humana’s shares to fall by 15%. Improvement is expected in 2026, thanks to a federal rate increase for Medicare Advantage insurers, and UnitedHealth is confident it can fix these issues.
The company also mentioned changes in patient activity under its Optum division and rising costs at the end of Q1. Despite these challenges, UnitedHealth had strong Q1 results, earning $6.47 billion in net income and $109.6 billion in revenue, both higher than last year.
