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Updated at 10:48 AM EDT
UnitedHealth Group posted weaker-than-expected first quarter earnings and lowered its full-year profit guidance, sending shares in the country's biggest health insurance group into their biggest tailspin in more than two decades.
UnitedHealth (UNH) said adjusted earnings for the three months ending n March came in at $7.20 a share, a 1.7% increase from the same period last year but 9 cents shy of the Wall Street consensus forecast.
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Group revenues rose 9.5% from last year to $109.6 billion, the company said, again missing analysts' consensus estimate of a $111.6 billion tally.
Optum revenues rose 4.6% from a year earlier to $63.9 billion. The division, which UnitedHealth purchased in 2011, is the main driver of the group's earnings. It's the nation's largest physician employer, with around 90,000 doctors under its wing.
UnitedHealth's medical-cost ratio, meanwhile, rose around 0.5 percentage point from a year earlier to 84.8%, suggesting that it paid out a larger portion of its collected premiums on insurance claims.
Overall premiums were up 11% to just under $78 billion in Q1, while medical costs rose 11.7% to $65.75 billion.
Related: UnitedHealth stock slides as Medicare Advantage concerns deepen
“UnitedHealth Group grew to serve more people more comprehensively but did not perform up to our expectations, and we are aggressively addressing those challenges to position us well for the years ahead, and return to our long-term earnings-growth rate target of 13% to 16%,” said CEO Andrew Witty.
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The group also 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.
UnitedHealth said the change reflected "heightened care activity indications within UnitedHealthcare’s Medicare Advantage businesses" and "a greater-than-expected impact to current and new complex patients from the ongoing Medicare funding reductions enacted by the previous administration."
UnitedHealth shares, a Dow component, were marked 21.6% lower in early Thursday trading following the earnings release to indicate an opening bell price of $458.02 each.
If the losses hold, the slump would mark the largest single-day decline in UnitedHealth shares in at least 25 years.