UnitedHealth Group Inc. UNH reported first-quarter 2025 adjusted earnings per share (EPS) of $7.20, which missed the Zacks Consensus Estimate of $7.27. However, the bottom line advanced 4.2% year over year. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Revenues rose 9.8% year over year to $109.58 billion. However, the top line missed the consensus mark by 1.4% due to lower-than-expected premiums, which is rare for the juggernaut.

The weaker-than-expected first-quarter results were caused by elevated medical costs, partly offset by domestic commercial membership growth and strength witnessed in Optum Rx.

Business Performance of UNH

UnitedHealth’s first-quarter premium of $86.5 million increased from $78 million a year ago but missed the consensus mark by 0.5%.
UnitedHealth’s medical care ratio (MCR) was 84.8% in the first quarter of 2025, which deteriorated from 84.3% a year ago. The metric was lower than the Zacks Consensus Estimate of 85.9% and our estimate of 85.3%. MCR witnessed an increase due to the previously noted reductions in Medicare funding, timing of Medicaid redeterminations and changes in the member mix. Medical costs of $73.4 billion rose from $65.7 billion a year ago.

First-quarter total operating costs of $100.5 billion escalated 9.4% year over year due to higher medical costs and the cost of products sold. The figure came higher than our model estimate of $99.8 billion. The first-quarter 2025 operating cost ratio improved to 12.4% from 14.1% in 2024 due to increased technological and other operating efficiencies and Part D programs. 

UnitedHealth’s operating earnings grew 15% year over year to $9.1 billion in the first quarter. The net margin improved from negative 1.4% a year ago to 5.7%.

Performance of UNH’s Business Platforms 

Revenues of the health benefits business of UnitedHealth, UnitedHealthcare, advanced 12.3% year over year to $84.6 billion in the first quarter due to an increase in domestic commercial membership growth. The metric beat the Zacks Consensus Estimate of $83.2 billion.

Earnings from operations amounted to $5.2 billion in the first quarter, up from $4.4 billion a year ago. The operating margin increased 40 bps year over year to 6.2%.

Revenues in the Optum business line were $63.9 billion, which rose 4.6% year over year due to strong contributions from Optum Rx. However, the figure fell short of the consensus mark of $67 billion. 

Optum’s earnings from operations climbed to $3.9 billion from $3.5 billion a year ago. The operating margin of 6.1% increased 30 bps year over year.

UnitedHealth’s Medical Membership

The UnitedHealthcare business catered to 50.1 million people as of March 31, 2025, which grew 1.9% year over year due to its self-funded commercial benefits. The figure missed the Zacks Consensus Estimate of 50.6 million but marginally beat our estimate of 50 million.

UNH’s Financial Position (As of March 31, 2025)

UnitedHealth exited the first quarter with cash and short-term investments of $34.3 billion, which rose from the 2024-end level of $29.1 billion. 

Total assets of $309.8 billion increased from the $298.3 billion figure at 2024-end. 

Long-term debt, less of current maturities, amounted to $71.29 billion, down from the $72.36 billion figure as of Dec. 31, 2024. Short-term borrowings and the current portion of long-term debt were $9.99 billion.

Total equity of $100.8 billion advanced from the 2024-end level of $98.3 billion.

UnitedHealth generated operating cash flows of $5.5 billion in first quarter of 2025, which surged from the prior-year figure of $1.1 billion.

UNH Capital Deployment Update

UnitedHealth rewarded more than $5 billion to its shareholders in the form of share repurchases ($3 billion) and dividends ($1.9 billion) in the first quarter.

UNH’s 2025 Outlook

Management now projects adjusted net EPS between $26 and $26.50 for 2025, down from the previous guidance range of $29.50-$30 compared with the 2024 figure of $27.66. Net earnings are expected in the band of $22.5-$23.1 billion, up from the 2024 level of $14.4 billion.

Revenues were earlier estimated between $450 billion and $455 billion in 2025, up from $400.3 billion in 2024. Operating cash flows were projected to be $32-$33 billion, up from $24.2 billion in 2024.

UNH’s Zacks Rank & Other Picks

UNH currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader medical space are Aveanna Healthcare Holdings Inc. AVAH, Universal Health Services, Inc. UHS and Option Care Health, Inc. OPCH, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Aveanna Healthcare’s current-year earnings of $0.12 per share has witnessed three upward revisions in the past 30 days against none in the opposite direction. Aveanna Healthcare beat earnings estimates in each of the trailing four quarters, with the average surprise being 163.3%. The consensus estimate for current-year revenues is pegged at $2.1 billion, implying 4.6% year-over-year growth.

The Zacks Consensus Estimate for Universal Health Services’ current-year earnings of $18.94 per share has witnessed two upward revisions in the past 30 days against no movement in the opposite direction. Universal Health Services beat earnings estimates in three of the trailing four quarters, with the average surprise being 15.5%. The consensus estimate for current-year revenues is pegged at $17.1 billion, implying 8.1% year-over-year growth.

The Zacks Consensus Estimate for Option Care Health’s current-year earnings of $1.68 per share has witnessed six upward revisions in the past 60 days against no movement in the opposite direction. Option Care Health beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.9%. The consensus estimate for current-year revenues is pegged at $5.4 billion, calling for 8.9% year-over-year growth.

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