(Bloomberg) -- UnitedHealth Group Inc. shares fell in early trading Tuesday after the company lowered the top end of its forecast, a rare move for the insurance giant that has often withstood pressures that hurt its competitors.
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The midpoint of UnitedHealth’s new guidance fell below analysts’ average view. The company’s shares dropped as much as 3.9% before US markets opened, as higher medical costs and the rising impact of a cyberattack weighed on earnings.
Adjusted profit will be $27.50 to $27.75 a share in 2024, a 25 cent drop from the prior top end of the range, the company said Tuesday.
The new outlook includes a bigger impact from a catastrophic hack of the company’s Change Healthcare division than UnitedHealth had previously forecast. Some costs for responding to the crisis were excluded from adjusted results.
UnitedHealth, the first of the group to report results, is seen as a bellwether for the sector. Its shares have increased 15% this year through Monday’s close. Rival insurers including Elevance Health Inc., Humana Inc. and Centene Corp. fell less than 1% in early trading after UnitedHealth announced results.
UnitedHealth’s adjusted third-quarter earnings were $7.15 a share, compared with analysts’ average estimate of $6.99. Quarterly revenue for the health-care giant was $100.8 billion, while analysts had estimated $99.2 billion.
The company’s medical-loss ratio, a crucial gauge of spending for patient care, was 85.2%, less favorable than Wall Street’s view. UnitedHealth cited pressure from Medicare, the US health program for the elderly.
US health insurers have been grappling with unexpected jumps in medical costs and lower payments from government programs for more than a year now, but UnitedHealth has largely been able to mitigate those challenges.
(Updates with new information throughout.)
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