UnitedHealth Shares Drop After Earnings Report Following CEO’s Murder

UnitedHealth’s shares fell nearly 5% after a disappointing earnings report post CEO’s tragic murder

UnitedHealth Shares Drop After Earnings Report Following CEO’s Murder
UnitedHealth Shares Drop After Earnings Report Following CEO’s Murder

Manhattan: UnitedHealth’s shares took a hit, dropping almost 5% on Thursday. This came after they reported lower-than-expected revenue in their first earnings report since the shocking murder of CEO Brian Thompson.

The company revealed it made $100.81 billion in revenue for the fourth quarter, which fell short of the $101.76 billion analysts were hoping for. They faced challenges with lower premiums than anticipated.

On the bright side, UnitedHealth did report adjusted net earnings of $6.81 per share, which was better than the expected $6.72. But the overall sentiment was still negative.

Thompson was tragically shot outside a Hilton hotel in Manhattan on December 4 while heading to an investors’ conference. A 26-year-old named Luigi Mangione has been charged with his murder.

The motive behind the assassination seems to stem from frustrations with the insurance industry, particularly regarding high premiums and denied claims. Some social media users even made dark jokes about the incident, expressing anger towards insurance companies.

Last year, rising medical costs in government-backed Medicare plans really hit the health insurance sector hard. As older Americans began to seek medical care again after the pandemic, profits from Medicare Advantage plans took a dive.

UnitedHealth, like other major insurers, relies heavily on Medicare, with about 26% of its revenue coming from this segment. Medicare Advantage plans offer more benefits than traditional Medicare, but increased usage can lead to lower profits.

The company’s medical cost ratio was reported at 87.6%, which is higher than the expected 85.95%. Typically, insurers aim for around 80%. This has raised concerns among investors about future trends.

Analysts noted that the market was disappointed that UnitedHealth only met its 2024 goals and kept its 2025 outlook unchanged. Shares of competitors like CVS Health and Elevance Health also saw declines.

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