By Sriparna Roy
(Reuters) -UnitedHealth forecast adjusted profit for 2025 below Wall Street estimates on Tuesday, ahead of its annual investor conference.
The company sees adjusted profit for the year to be between $29.50 and $30.00 per share, the midpoint of which was below analysts’ estimates of $29.92 according to data compiled by LSEG. It had earlier forecast a profit of as much as $30 per share.
Shares of the company fell 1% to $599.17 after the bell.
UnitedHealth, similar to other health insurers, has seen a surge in demand for healthcare services under the government-backed Medicare plans for people aged 65 years and older or those with disabilities.
Recent government payment rates and changes in Medicaid eligibilities from states leading to a shift to more sick patients have also impacted profits for insurers due to higher medical costs.
The company had said in October it set next year’s forecast “more conservatively than is typical” due in part to payment cuts from the government for Medicare and low state payment rates for Medicaid plans for low-income people.
For 2025, the company sees revenue to be between $450 billion and $455 billion, compared with estimates of $431.40 billion.
The outlook represents a solid starting point for a company that provides forecasts conservatively, “though the devil will be in the details,” said Oppenheimer analyst Michael Wiederhorn.
The company expects cash flows from operations to range from $32 billion to $33 billion.
UnitedHealth’s investor conference is scheduled for Wednesday, where company executives are expected to provide more details on the forecast.
Investors are likely to focus on what the largest U.S. health insurer says about drivers of higher revenue, details on medical costs and healthcare demand trends.
(Reporting by Sriparna Roy in Bengaluru; Editing by Alan Barona and Krishna Chandra Eluri)
