09:12 AM EDT, 07/29/2025 (MT Newswires) -- UnitedHealth Group ( UNH ) provided a new full-year outlook on Tuesday that fell short of market estimates, while the health insurance giant's second-quarter earnings declined more than expected on an annual basis.

The company anticipates adjusted earnings of at least $16 per share for 2025, while revenue is projected to come in between $445.5 billion and $448 billion. The current consensus on FactSet is for non-GAAP EPS of $20.64 and sales of $448.84 billion. The stock fell 4.6% in the most recent premarket activity.

The health insurer shelved its full-year forecast in May due to higher-than-expected medical costs and appointed Stephen Hemsley as its new chief executive, succeeding Andrew Witty. In April, the company estimated adjusted EPS to be in a range of $26 to $26.50 for the ongoing year.

UnitedHealth ( UNH ) said its new outlook reflects its performance in the first half and expectations for higher realized and anticipated care trends in the remainder of the year. The firm aims to return to earnings growth in 2026, it added.

"UnitedHealth Group ( UNH ) has embarked on a rigorous path back to being a high-performing company," Hemsley said in the Tuesday earnings release. "As we strengthen operating disciplines, positioning us for growth in 2026 and beyond, the people at UnitedHealth Group ( UNH ) will continue to support the millions of patients, physicians and customers who rely on us."

For the June quarter, the company posted adjusted EPS of $4.08, down from $6.80 the year before and below the Street's view for $4.48. The result reflects $1.2 billion of unfavorable discrete impacts, including a $620 million headwind from the firm's individual exchange business, tied to the acceleration of future losses related to the second half, as well as several settlement and other provisions.

Revenue climbed to $111.62 billion from $98.86 billion in the prior-year period, topping the average analyst estimate of $111.5 billion.

Revenue in the UnitedHealthcare segment, which provides health care benefits to people including Medicare and Medicaid beneficiaries, grew 17% to $86.1 billion. The division served 50 million people in the quarter, representing a year-to-date increase of 770,000, according to the health insurer. For 2025, revenue in the segment is expected to be between $344 billion and $345.5 billion.

"While we face challenges across our lines of business, we believe we can resolve these issues and recapture our earnings growth potential while ensuring people have access to high-quality, affordable health care," UnitedHealthcare CEO Tim Noel said in the statement.

The Optum business, which serves the global health care marketplace, logged sales of $67.23 billion, up from $62.88 billion in the previous year. Within the segment, Optum Insight and Optum Rx recorded revenue gains, while Optum Health decreased to $25.21 billion from $27.05 billion.

UnitedHealth ( UNH ) said its medical care ratio, which is used to measure medical costs as a percentage of premium revenue, rose by 430 basis points year over year to 89.4%. The company attributed the increase to medical cost trends, which significantly exceeded pricing, including unit costs and the intensity of services delivered, as well as the ongoing effects of funding reductions in the Medicare business.

Last week, UnitedHealth ( UNH ) disclosed that it is being investigated by the US Department of Justice over the company's participation in the Medicare program. The health insurer confirmed that it has begun complying with "formal criminal and civil requests" from the regulator, after The Wall Street Journal reported in May that it was facing a criminal probe by the DOJ over possible Medicare Advantage fraud.