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UnitedHealth shares plunged 20 per cent on Thursday after the US health and insurance group slashed its annual profit forecast.
More than $100bn of market value was wiped out in pre-market trading after UnitedHealth warned it had experienced a surge in demand for medical services from older customers that was “far above” expectations.
The company said it expected net earnings per share this year in a range of $24.65 to $25.15, down from a previous forecast of $28.15 to $28.65.
Chief executive Andrew Witty said the company “did not perform up to our expectations, and we are aggressively addressing those challenges to position us well for the years ahead”.
Shares in the Minneapolis-based group were down 20 per cent at $471.25 and weighed down the insurance sector. Humana fell 15 per cent, Elevance Health lost 10 per cent and CVS Health was down 7.5 per cent.
UnitedHealth said its outlook cut was also due to a “greater than expected” hit from cuts to spending on older patients by the previous Biden administration.
The company is still dealing with the aftermath of the killing in December of one of its top executives, Brian Thompson, who was fatally shot outside an investor event in New York.
The US is seeking the death penalty for 26-year-old Luigi Mangione, who was charged with murder and stalking in the death of Thompson. Mangione won some acclaim on social media from people who viewed the murder as retribution for the country’s sometimes expensive and fraught healthcare system.
UnitedHealth posted first-quarter revenues of $109.6bn, missing analysts’ expectations by 1.8 per cent. The figure represented an almost 9 per cent increase from the same period last year.
UnitedHealth said it believed the factors that led to its outlook cut were “highly addressable over the course of this year”.
The company, which covers approximately 50mn Americans, is facing an antitrust investigation over its status as the country’s biggest health insurer.
