(CTN News) – The shares of UnitedHealth Group (UNH) dropped by 22% beginning on Thursday morning, following the announcement that the healthcare giant’s first-quarter results did not meet the expectations of analysts and that it reduced its profit projections for the year 2025.

This was done as a reaction to the fact that the company had reduced its profit projections for the year 2025. The occurrence of both of these events took place immediately after the announcement was made by the company.

The adjusted earnings per share (EPS) that UnitedHealth reported were $7.20, and the company’s revenue was $109.58 billion. This represents a 10% increase on the previous year. This corresponds to the amount of money that the company made.

The company also reported that its revenue had grown by 10%.

According to the findings of a survey conducted by Visible Alpha, analysts forecast anything between $7.25 billion and $111.46 billion. It was for the purpose of gathering information that the survey was carried out.

The corporation, which has its headquarters in Eden Prairie, Minnesota, has announced that it has revised its earnings per share (EPS) projections for the year 2025 to a range of $24.65 to $25.15.

Additionally, the company has revised its adjusted EPS projections to a range of $26 to $26.50. The implementation of both of these revisions took place. During the most recent quarter, UnitedHealth reported that it anticipated generating earnings per share for the full year in the range of $28.15 to $28.65, with adjusted EPS of $30.00.

This was stated in the context of the company’s earnings forecast. It was included in the quarterly report of the company that this guidance was presented. When these remarks were made, they were in reference to the most recent quarter that the company had finished.

UnitedHealth attributed the decline in outlook to “heightened care activity indications” in its Medicare Advantage business as well as “unanticipated changes in the profile of Optum Health members impacting planned 2025 reimbursement.” Both of these factors contributed to the decline in outlook.

The decreases were attributed to both of these factors, which were cited as the cause. Throughout the course of the research, it was determined that both of these elements were significant contributors to the declines in outlook that were observed.

The combination of rising medical care costs and decreased government reimbursements for Medicare Advantage claims will, according to analysts, result in higher costs for insurers that operate Medicare Advantage plans, such as UnitedHealth.

This is because government reimbursements for Medicare Advantage claims are likely to decrease. The reason for this is that the simultaneous presence of these two elements will result in an increase in expenditures.

On Thursday, the share prices of other health insurance companies, such as CVS Health (CVS), Humana (HUM), Elevance Health (ELV), and Centene (CNC), dropped as a result of concerns regarding the prices of their services.

The shares of UnitedHealth reached their lowest point since approximately a year ago, which coincided with the occurrence of this event. To add insult to injury, this occurrence took place simultaneously.

“UnitedHealth did not perform up to our expectations,” said UnitedHealth’s CEO.

“We were not satisfied with the result.” The Chief Executive Officer of the company, Andrew Witty, issued a statement in which he stated that the company “did not perform up to our expectations, and we are aggressively addressing those challenges in order to position us well for the years ahead.”

Compared to the beginning of the year, the value of UnitedHealth’s stock had increased by approximately sixteen percent as of the beginning of the day.

The Department of Justice of the United States of America was reportedly conducting an investigation into the diagnostic procedures of the company, as stated in a report that was published in February. As a direct consequence of the report, this indicates that there has been a positive recovery from the decline that took place in February.

SOURCE: IPN