UnitedHealth Group Posts Mixed Results: Revenue Surges, Earnings Miss Expectations
UnitedHealth Group, the U.S.'s largest health insurer, has reported a mixed bag of results. While revenues surged to nearly $111.6 billion, up 12.8% year-over-year, earnings per share missed expectations. Meanwhile, Optum Health's revenues dipped due to Medicare cuts, and Optum Rx's revenue soared by 19%.
UnitedHealth Group's second-quarter revenue climbed to $111.6 billion, a 12.8% increase from last year. However, earnings per share fell short of expectations due to rising medical costs and pricing misalignments. Optum Rx, a pharmacy care services division, saw a 19% revenue boost to $38.5 billion, driven by specialty drugs and new customers. Optum Insight's revenues also grew by 6% to $4.8 billion, recovering from a cyberattack last year.
Optum Health, however, faced a setback with revenues decreasing to $25.2 billion due to Medicare funding cuts and contract modifications. Looking ahead, UnitedHealth Group anticipates full-year 2025 revenue to reach $448 billion, an 11% increase year-over-year. Despite this, analysts predict earnings to decline by 41.3% to $16.2 per share in 2025, before rebounding by 11.4% in 2026.
UnitedHealth Group's stock has taken a hit, down 29% year-to-date and 43% from its 52-week high. Wall Street expresses concerns about rising healthcare costs, regulatory pressures, and intensified competition potentially straining profit margins. Nevertheless, the company offers a steady dividend yield of 2.46%, outperforming the healthcare sector average.
