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UnitedHealth Group
Chairman and CEO Stephen Hemsley will face the first real test Tuesday of his ability to regain investor confidence as the largest private U.S. insurer reports earnings.
The Dow component has seen its share price cut nearly in half since mid-May, with the stock on pace for its worst year in more than a decade, after earnings in its flagship Medicare program and Optum Health physician practices plummeted. That led to the abrupt resignation of former CEO Andrew Witty, forcing the company to reinstate ex-CEO Hemsley to replace him and suspend earnings guidance. On top of that, the company is facing criminal and civil Department of Justice investigations into its Medicare billing practices.
As UnitedHealth faces challenges on multiple fronts, it sits in a “perfect storm,” said Mizuho Securities analyst Ann Hynes. Now, investors want to know how Hemsley plans to steer the company out of the whirlwind, after assuring them last June that “we’re humbly determined to earn back your trust and your confidence.”
