- UnitedHealth Group (UNH, Financial) revises 2025 earnings guidance due to rising Medicare Advantage costs.
- Q1 2025 revenues increase by $9.8 billion year-over-year to $109.6 billion.
- Return of nearly $5 billion to shareholders via dividends and buybacks in Q1 2025.
UnitedHealth Group (UNH) has announced its first-quarter 2025 results, reporting revenues of $109.6 billion, a $9.8 billion increase from the previous year. However, the company has revised its earnings guidance for 2025 amid challenges in its Medicare Advantage business and reimbursement issues within Optum Health.
The company's full year 2025 earnings projection is now set at $24.65 to $25.15 per share, with adjusted earnings expected between $26.00 to $26.50 per share. These revisions are largely attributed to heightened care activity in the Medicare Advantage sector and unexpected changes in Optum Health member profiles impacting reimbursement plans.
UnitedHealth's Q1 medical care ratio increased to 84.8%, up from 84.3% in 2024, indicating cost pressures from increased care activity. Despite these challenges, UnitedHealth added 780,000 new members year-to-date and continued to see growth in its value-based care patients through Optum Health.
In the first quarter, UnitedHealth returned almost $5 billion to shareholders through dividends and share repurchases, reflecting a robust operating cash flow of $5.5 billion. The company's return on equity stood at 26.8%, underlining its capital efficiency amid the operational challenges.
CEO Andrew Witty acknowledged these issues, expressing confidence in the company’s strategic initiatives to address them and return to its long-term earnings growth target. The anticipated challenges highlight broader systemic pressures in the healthcare sector, particularly affecting the sustainability of Medicare Advantage programs.
