{"id":302982,"date":"2025-07-30T04:26:09","date_gmt":"2025-07-30T04:26:09","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/302982\/"},"modified":"2025-07-30T04:26:09","modified_gmt":"2025-07-30T04:26:09","slug":"unitedhealth-says-it-faces-1-6bn-in-potential-settlement-costs","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/302982\/","title":{"rendered":"UnitedHealth says it faces $1.6bn in potential settlement costs"},"content":{"rendered":"

Unlock the Editor\u2019s Digest for free<\/p>\n

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n

US healthcare group UnitedHealth faces $1.6bn in potential settlement costs, the conglomerate said on Tuesday, amid government investigations and a corporate turnaround effort to return to earnings growth next year.<\/p>\n

In its results for the three months ending in June, the health and insurance group reported net earnings of $3.4bn, a 19 per cent fall on the same period last year. Earnings per share were $3.74, down from $4.54 a year ago and below analyst estimates of $4.22, according to S&P.<\/p>\n

UnitedHealth<\/a>\u2019s shares were down 7.5 per cent on Tuesday and its stock is down 48 per cent this year. <\/p>\n

Tuesday\u2019s earnings marked the first for new chief executive Stephen Hemsley, who returned as CEO in May, replacing Andrew Witty, a former GlaxoSmithKline CEO, who stepped down as the company pulled its annual guidance, sending UnitedHealth\u2019s stock to the lowest level in more than four years<\/a>.<\/p>\n

For years, UnitedHealth outperformed the S&P 500 index with a business model that included health insurance, primary care<\/a> and pharmacy services. UnitedHealth is the biggest employer of physicians in the US.<\/p>\n

But recently, UnitedHealth has been hurt by higher patient claims costs. The company underestimated these costs, prompting its first-quarter earnings miss and its decision to withdraw guidance in May.<\/p>\n

On Tuesday, UnitedHealth re-established future guidance, estimating its 2025 revenue would be $445.5bn to $448bn and net earnings would be at least $14.65 per share. The company said it expected to return to earnings growth in 2026.\u00a0<\/p>\n

But UnitedHealth said its growth would be stung by $1.6bn \u201cof potential settlement items.\u201d The US Department of Justice is examining UnitedHealth\u2019s large Medicare Advantage unit. Last week, UnitedHealth acknowledged it is under a DoJ criminal investigation<\/a> concerning its Medicare billing programme.<\/p>\n

Amid the government investigations, Hemsley said the company had put a pause on exploring corporate deals.<\/p>\n

\u201cWe stopped that entire activity,\u201d he said on a call with analysts. \u201cWe are focused on the performance of the businesses that we have and will pick up portfolio assessment somewhere down the road.\u201d<\/p>\n

Recommended<\/p>\n

\"Donald<\/a><\/p>\n

Jeff Jonas, a portfolio manager at Gabelli Funds, said UnitedHealth was likely to increase share buybacks to reach its earnings targets \u201clargely because they can\u2019t pursue more acquisitions\u201d.<\/p>\n

\u201cThey\u2019re bumping up against antitrust limits and have already faced tough regulatory reviews on their most recent deals.\u201d<\/p>\n

To resolve the government investigations, \u201cultimately, they\u2019ll settle and pay a fine, but not this year\u201d, Jonas said. \u201cThese things move slowly, and even a resolution sometime next year might be considered fast.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":302983,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4316],"tags":[105,4348,16,15],"class_list":{"0":"post-302982","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-healthcare","8":"tag-health","9":"tag-healthcare","10":"tag-uk","11":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114940293278124436","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/302982","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=302982"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/302982\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/302983"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=302982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=302982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=302982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}