UnitedHealth Posts Mixed Q2 Results; Shares Dip Pre-Market

UnitedHealth Group (UNH) posted second-quarter profits on Tuesday, topping Wall Street's top-line estimates by a narrow margin but falling short on the bottom line. However, its earnings continue an industry-wide trend of higher-than-expected costs this quarter.

The business announced revenues of $111.6 billion, compared to Wall Street projections of $111.53 billion, and adjusted earnings per share (EPS) of $4.08, versus the Street's expectation of $4.59. Revenues are up about $13 billion year on year, compared to the second quarter of 2024. However, margins have decreased, from 4.3% in 2024 to 3.1% this quarter.

The company also updated its full-year outlook, which was pulled last quarter. It now forecasts revenues of $445.5 to $448.0 billion, with earnings adjusted to at least $16 per share.

UnitedHealth's stock fell more than 3% in premarket trade on Tuesday, following the release of its earnings report.  

UnitedHealth Group Inc. – UNH Stock Overview

More patients seeking care translates into higher rates and lower income for health insurance. Insurers often seek to be at the lower end of the medical expense ratio, which ranges from 80% to 85% of premiums received.

UnitedHealth reported 89.4% this quarter, up from 84.8% in the first. That figure is the highest in the company's history, breaking the previous record of 85.5% set in 2024, which was attributed to increased care consumption among seniors.

The incident sparked a wake-up call in the insurance sector, which has faced criticism for its prior authorization system, which results in rejections of services. Several firms, as well as the Trump administration, have committed to addressing the issues and reducing prior authorization requirements for patients.

Humana officials announced last week during an earnings call that the firm would reduce prior authorizations by one-third of its current volume. UnitedHealth previously stated that it only sees prior authorizations for 2% of total claims and plans to lower that number even more.

UnitedHealth said Tuesday that, under Hemsley's leadership, the business is focused on increased transparency and plans to continue providing more insight into its operations as it rebuilds.