UnitedHealth Group stock tumbles; Andrew Witty steps down as group CEO
UnitedHealth Group shares tumbled in early Tuesday trading after the heath care giant suspended its 2025 profit outlook and said Andrew Witty would step down as group CEO.
UnitedHealth (UNH) , which has been reeling from the impact of surging medical costs, changes to Medicare Advantage reimbursements and the murder of Brian Thompson, the former CEO of its health benefits division late last year, said Witty was leaving his role for “personal reasons”.
He’ll be replaced by Stephen Hemsley, who ran UnitedHeath Group from 2006 to 2017 and has since served as board Chairman.
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“We are grateful for Andrew’s stewardship of UnitedHealth Group, especially during some of the most challenging times any company has ever faced,” Hemsley said in statement. “The Board and I have greatly valued his leadership and compassion as chief executive and as a director and wish him and his family the best.”
“UnitedHealth Group has tremendous opportunities to grow as we continue to help improve health care and to perform to our potential — and, in so doing, return to our long-term growth objective of 13% to 16%,” he added.
Related: UnitedHealth stock tumbles after Medicare Advantage changes hit outlook
The group also suspended its full-year profit outlook, noting that “care activity continued to accelerate while also broadening to more types of benefit offerings than seen in the first quarter, and the medical costs of many Medicare Advantage beneficiaries new to UnitedHealthcare remained higher than expected.”
Last month, UnitedHealth lowered its full-year profit forecast to between $24.65 and $25.15 per share, down from its early January estimate of between $29.50 and $30 per share, citing “heightened care activity indications” and Medicare funding reductions.
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UnitedHealth said its medical-cost ratio, a key performance metric which captures the gap between collected premiums and medical payouts, rose to 84.8% over the three months ending in March.
Overall premiums were up 11% to just under $78 billion in Q1, while medical costs rose 11.7% to $65.75 billion.
UnitedHealth shares were last marked 7.6% lower in premarket trading to indicate an opening bell price of $350 each.
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