Topline

Shares of UnitedHealth took a historic tumble Thursday after the U.S.’ largest health insurer fell far short of Wall Street’s estimates in its quarterly earnings report, dragging down the blue chip Dow Jones Industrial Average with it.

Key Facts

UnitedHealth stock nosedived by 22.4%, falling by $131 per share from Wednesday’s $585 close to $454.

That made Thursday the Minnesota-based firm’s steepest daily loss since Aug. 6, 1998.

The losses came after UnitedHealth’s first-quarter financial report was worse than analysts expected across each of the three major quarterly yardsticks: revenue, earnings per share and future earnings outlook.

The company’s $109.6 billion in revenue and $7.20 adjusted earnings per share last quarter were both more than 1% below consensus analyst estimates, according to FactSet, while its guidance for $26 to $26.50 in adjusted EPS this year is more than 10% below forecasts of $29.72 full-year EPS prior to the Q1 release.

UnitedHealth “did not perform up to our expectations,” the company’s CEO Andrew Witty said in a statement accompanying the earnings release.

The UnitedHealth slide weighed heavily on the Dow, which fell 527 points, or 1.3%.

Contra

Thursday was an otherwise mild day for stocks, as the S&P 500 climbed 0.1% and the Nasdaq inched down 0.1%. The far different movements for the Dow and the two other major indexes came due to the 30-company Dow’s weighting based on share price, as UnitedHealth was the largest component of the Dow at Wednesday’s close. The health insurance giant lost that mantle to Goldman Sachs bank Thursday.

Surprising Fact

$120 billion. That’s about how much market capitalization UnitedHealth lost Thursday, knocking it from the U.S.’ 14th-most valuable company to its 18th largest.

Big Number

Shares of another major American healthcare company, drugmaker Eli Lilly, had a far different fate early Thursday, surging 15% after sharing trial data that its weight loss pill showed similar results to injectable GLP-1 drugs like Ozempic.

Key Background

UnitedHealth is most notably the parent of UnitedHealthcare, which had a market share of 14% in commercial health insurance markets and 28% share in Medicare Advantage in 2023, both the largest of any insurer, according to the American Medical Association. The UnitedHealthcare division came to national prominence late last year after its CEO Brian Thompson was shot and killed in New York ahead of an investor meeting. The Department of Justice is conducting a civil fraud probe into UnitedHealth’s billing practices for Medicare, The Wall Street Journal reported in February.