Shares of UnitedHealth took a historic tumble Thursday after the U.S.’ largest health insurer fell far short of Wall Street’s estimates in its quarterly earnings report, dragging down the blue chip Dow Jones Industrial Average with it.
The UnitedHealthcare parent is on track to lose more than $100 billion in market value Thursday.
Universal Images Group via Getty Images
Key Facts
UnitedHealth stock nosedived 20% in morning trading, falling by $116 per share from Wednesday’s $585 close to $469.
The Minnesota-based firm is on track for its steepest daily loss since Aug. 6, 1998.
The losses came after UnitedHealth’s first-quarter financial report was worse than analysts expected across each of the three major quarterly yardsticks: revenue, earnings per share and future earnings outlook.
The company’s $109.6 billion in revenue and $7.20 adjusted earnings per share last quarter were both more than 1% below consensus analyst estimates, according to FactSet, while its guidance for $26 to $26.50 in adjusted EPS this year is more than 10% below forecasts of $29.72 full-year EPS prior to the Q1 release.
UnitedHealth “did not perform up to our expectations,” the company’s CEO Andrew Witty said in a statement accompanying the earnings release.
The UnitedHealth slide weighed heavily on the Dow, which fell 500 points, or 1.3%, Thursday morning.
Contra
Thursday morning was an otherwise strong start for stocks, as futures for the S&P 500 and the Nasdaq rose 0.6% and 1%, respectively. The far different movements for the Dow and the two other major indexes came due to the 30-company Dow’s weighting based on share price, as UnitedHealth was the largest component of the Dow at Wednesday’s close. The health insurance giant is on pace to lose that mantle to Goldman Sachs bank at open.
Surprising Fact
$106 billion. That’s how much market capitalization UnitedHealth is set to lose Thursday, which would knock it from the U.S.’ 14th most valuable company to its 18th largest.
Big Number
Shares of another major American healthcare company, drugmaker Eli Lilly, had a far different fate early Thursday, surging more than 10% after sharing trial data that its weight loss pill showed similar results to injectable GLP-1 drugs like Ozempic.
Key Background
UnitedHealth is most notably the parent of UnitedHealthcare, which had a market share of 14% in commercial health insurance markets and 28% share in Medicare Advantage in 2023, both the largest of any insurer, according to the American Medical Association. The UnitedHealthcare division came to national prominence late last year after its CEO Brian Thompson was shot and killed in New York ahead of an investor meeting. The Department of Justice is conducting a civil fraud probe into UnitedHealth’s billing practices for Medicare, the Wall Street Journal reported in February.
