UnitedHealth Group heads into its second-quarter earnings with the stock price (NYSE: UNH) having been cut in half over the past 12 months. With earnings due tomorrow, before the market opens, those looking to make any moves on UNH are eagerly looking at what markets might be looking for from the beleaguered firm.
Analysts anticipate an EPS of $4.49 and revenue of $111.59 billion for the second quarter. These expectations reflect a cautious outlook, acknowledging the challenges the company faces.
Whilst the EPS is expected to narrow substantially from the $6.80 hit in the same period last year, revenue is expected to come in at a sales growth rate of 12.8%. Improved revenue, albeit with a narrower profit margin.
Key Watch Points for Q2 Earnings
- Response to DOJ investigation on Medicare Advantage billing practices
- Impact of recently secured agreement with Memorial Sloan Kettering Cancer Center
- Management of rising healthcare costs and margin pressures
- Revised guidance for FY 2025 after prior withdrawal
- Update on CEO transition and strategic initiatives
The upcoming earnings announcement is particularly crucial following a disappointing first quarter. In April 2025, UnitedHealth reported an EPS of $7.20, missing the consensus estimate of $7.29. Revenue also fell short, reaching $109.58 billion against an expected $111.56 billion. This marked a rare earnings miss for the company, triggering a sharp 20%+ decline in the stock.
The pressure is on for UNH to demonstrate a strong rebound and reassure investors that it can navigate the current turbulent environment, with the stock down 50% over the past 12 months, and 44% down since the start of the year.
Adding to the complexity, UnitedHealth is currently under scrutiny from the U.S. Department of Justice (DOJ). A civil case has been initiated regarding the company's billing practices within its Medicare Advantage program.
This investigation introduces a layer of regulatory risk and could potentially lead to significant financial penalties or operational changes.
As markets await the release of UnitedHealth's second-quarter earnings, they will be closely scrutinizing the report for insights into the company's ability to manage rising healthcare costs, navigate regulatory challenges, and implement strategic initiatives aimed at stabilizing and growing its business.
With UNH down at levels not seen in 5 years, bears have clearly had the better of things over the past year. EPS expectations have also narrowed leading into the print, with 8 downward revisions in the past 30 days, with only one revising to the upside.
It may take a little while for a potential turnaround story to play out here.
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