UnitedHealth Group Stock Plummets 23% on Earnings Miss, Forecast Cut

On the evening of April 17, the U.S. stock market experienced a significant downturn, with UnitedHealth Group's stock price plummeting by over 23% shortly after the market opened. The company's latest financial report revealed that its first-quarter revenue and earnings fell short of expectations, and it lowered its earnings forecast for the fiscal year 2025. The stock price of UnitedHealth Group continued to decline, reaching a 22.8% drop by 11:00 PM, with a total market value of approximately $412.9 billion. The company's first-quarter earnings per share were $7.20, below the expected $7.29, and revenue grew by 9.8% year-over-year to $109.6 billion, also below analyst estimates of $111.5 billion. UnitedHealth Group attributed the downward revision of its annual profit forecast to anticipated cost increases, projecting earnings per share for the year to be between $26 and $26.50, significantly lower than the previous estimate of $29.50 to $30 and the market expectation of $29.74.

Meanwhile, Alcoa Corporation, a major U.S. aluminum producer, also faced a financial setback. The company's first-quarter revenue for 2025 was $3.37 billion, a 29.6% increase year-over-year but below market expectations. Net income for the quarter was $548 million, compared to a net loss of $252 million in the same period last year. Alcoa Corporation stated that the U.S. tariffs on aluminum imports from Canada are expected to result in a loss of approximately $90 million in the second quarter. The company's CEO, Roy Harvey, mentioned during the earnings call that about 70% of the aluminum produced in Canada is sold to U.S. customers, and the 25% tariff has already caused a $20 million loss in the first quarter. Consequently, Alcoa Corporation's stock price dropped by over 7%.

In addition to these developments, NVIDIA's stock price also experienced a significant decline, falling by over 4% during intraday trading. This downturn was influenced by Morgan Stanley's revised forecast for the global semiconductor industry, which lowered the expected revenue growth for 2025 due to the impact of tariff policies. The analyst team led by Harlan Sur noted that while most semiconductor companies met or slightly exceeded first-quarter expectations, the outlook for the second quarter and beyond is more conservative. The team warned that the semiconductor industry could face a 15% to 25% reduction in earnings per share (EPS) estimates for the year, potentially triggering a new cycle of negative earnings revisions and further stock declines of 10% to 15% in the coming months. The analyst compared the current situation to the 2018 U.S.-China trade tensions, during which the semiconductor industry's EPS estimates were reduced by 20% to 25% over two to three quarters, leading to a significant drop in the semiconductor index.

The market's reaction to these financial reports was swift and severe, with all three major U.S. stock indices experiencing declines. The Dow Jones Industrial Average fell by 1.56%, the Nasdaq Composite Index dropped by 0.5%, and the S&P 500 Index declined by 0.12%. The significant drop in UnitedHealth Group's stock price was a major contributor to the Dow Jones' decline. The overall market sentiment was dampened by the series of financial setbacks, highlighting the challenges faced by companies in the healthcare, aluminum, and semiconductor sectors due to cost increases, tariff policies, and global trade tensions. The market's response underscores the importance of accurate financial reporting and the impact of external factors on stock performance.