UnitedHealth Group didn’t just miss earnings, it did something far worse
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In less than a month, this corporate giant had lost more than half its value.
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July 31, 2025
10:00 AM
Fortune
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Finance·UnitedHealthcareUnitedHealth Group didn’t just miss earnings, it did something far worseBy Geoff ColvinBy Geoff ColvinSenior Editor-at-LargeGeoff ColvinSenior Editor-at-LargeGeoff Colvin is a senior editor-at-large at Fortune, covering leadership, globalization, wealth creation, the info revolution, and related issues.SEE FULL BIO Stephen Hemsley returned to run UHG but investors aren't seeing much to love yet.UnitedHealth Group, America’s largest healthcare company, shocked investors Tuesday by reporting unexpectedly awful financial performance
It’s the second consecutive quarter the company has committed that sin
As a result, UHG is no longer just a company that missed its numbers
It’s something much more rare: A huge enterprise—No. 3 on the Fortune 500—confessing fundamental, long-standing blems endemic throughout the organization that may take years to remedy
The crisis first manifested in April
UHG was emerging from the trauma of executive Brian Thompson’s high-file murder in December when the company released first-quarter fits far below Wall Street’s expectations
The stock plunged, slashing over $100 billion from market value within hours
A month later, CEO Andrew Witty abruptly resigned for unspecified personal reasons, and former CEO Stephen Hemsley returned to the job
The stock plummeted again
The next day, the Wall Street Journal reported that the Department of Justice was investigating UHG for possible criminal Medicare fraud
The company said it hadn’t been notified of any such investigation
The stock nosedived yet again
In less than a month, this corporate giant had lost more than half its value. “This is a stock that every growth-oriented portfolio manager in the world owned for a decade and made money on it clockwork,” Whit Mayo, an analyst at the Leerink healthcare investment bank, told Fortune at the time. “It’s stunning
It’s unthinkable.” On July 24, five days before UHG’s second quarter earnings release, the company acknowledged that the Justice Department was conducting criminal and civil investigations of the company over its Medicare billing practices
You can guess what the stock did
And then came the report of second quarter earnings
Now, after months of being pummeled by investors, regulators, and media, Hemsley has admitted that UHG needs an exhaustive, stem-to-stern rehab—an extraordinarily audacious goal for an organization of some 400,000 employees
It’s a stark acknowledgement of deep and wide blems
How deep and wide? Hemsley says UHG will change “leadership, our es, our culture, apaches and practices, our board, governance and succession oversight…” Executives now beseech holders for patience—quite a change from four months ago, before $330 billion of market cap evaporated
Patrick Conway, CEO of Optum, one of UHG’s two main divisions, now tells investors, “We know Optum’s performance has not met expectations.” Tim Noel, CEO of the other division, insurance, says, “We are apaching our with greater humility.” Hemsley appears to be setting expectations low
He says he does not see fit increasing at all this year
Next year, he sees “solid but moderate” earnings growth
Not until 2027 does he expect “our earnings growth outlook strengthening quickly.” Even that schedule may not allow enough time
When Hemsley returned as CEO in June, the board of directors gave him a one-time $60-million award of stock options that would vest after three years
That term seemed lengthy for a 73-year-old whose objective was to right the ship
Now, after the quarter and the highly ambitious wide-ranging transformation he’s attempting, investors may wonder if three years will be enough
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