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UnitedHealth’s fresh ’25 outlook comes in below forecasts. (0:15) Novo Nordisk tumbles as it warns on obesity drug sales. (1:31) Union Pacific and Northern Southern seal merger. (5:07)
This is an abridged transcript of the podcast:
Our top story so far, UnitedHealth (UNH) shares continue to struggle after the company issued a fresh outlook for 2025, indicating revenue and adjusted earnings below Street forecasts amid a sharp increase in its medical expenses.
The stock, in the red today, has lost more than half its value since it warned on the outlook in April and since faced a series of negative headlines, including the abrupt departure of its CEO and a probe into its Medicare business.
With its Q2 results, which missed on the bottom line, the company projected EPS of $16 on $445.5 billion to $448 billion in revenue. Analysts were looking for EPS of $20.90 and revenue of $449.07 billion.
UNH attributed the cost increase to medical cost trends that sharply outweighed pricing trends and an ongoing impact of Medicare funding reductions.
New CEO Stephen Hemsley said: “UnitedHealth Group has embarked on a rigorous path back to being a high-performing company fully serving the health needs of individuals and society broadly.”
UNH reported $111.6 billion in revenue for the quarter, up about 13% annually and in line with Street forecasts, thanks mainly to its insurance unit, UnitedHealthcare, and Optum division.
Seeking Alpha analyst YR Research said, “it’s now up to management to convince investors that this is the floor and that the legal and fraud allegations are insignificant.”
Also in the healthcare sector, Novo Nordisk (NVO) is tumbling after the Danish drugmaker lowered its full-year outlook, citing, among other things, pressure on its obesity drug franchise led by its GLP-1 medication semaglutide.
At the same time, the company named Maziar Mike Doustdar as its new president and chief executive officer, effective Aug. 7, after the current CEO agreed to step down in May. Doustdar is currently executive vice president of International Operations.
Eli Lilly (LLY), Novo’s main rival in the weight loss drug market, and Hims & Hers Health (HIMS), which makes compounded versions of semaglutide, are also facing selling.
With its H1 2025 results, Novo Nordisk set its full-year growth outlook for sales and operating profit at 8% – 14% and 10% – 16% on a currency-adjusted basis, compared to 13% – 21% and 16% – 24% projected in May.
The company cited lower growth expectations in the U.S. related to Wegovy and Ozempic, the FDA-approved versions of semaglutide indicated for obesity and diabetes.
And Merck (MRK) is cutting $3 billion from its annual expenses as it prepares for generic competition to its blockbuster cancer drug, Keytruda.
The company issued an updated outlook for full-year 2025, expecting sales of $64.3 billion to $65.3 billion (prior: $64.1 billion to $65.6 billion) and adjusted EPS of $8.87 to $8.97 (prior: $8.82 to $8.97). Consensus is full-year EPS of $8.87 on revenue of $64.93 billion.
Among other active stocks, United Parcel Service (UPS) is under pressure after the delivery company issued a mixed Q2 earnings report. Revenue was 3.4% lower than a year ago during the quarter to $21.2 billion and adjusted EPS came in at $1.55 vs. $1.57 consensus and $1.79 a year ago.
UPS still did not provide revenue or operating profit guidance due to current macroeconomic uncertainty, but confirmed that it anticipates capital expenditures of about $3.5 billion and share repurchases of around $1 billion, which have been completed.
Procter & Gamble (PG) beat fiscal Q4 earnings estimates. Organic sales increased 2% to edge past the consensus estimate of up 1.8%.
CEO Jon Moeller said: “We grew sales and profit in fiscal 2025 and returned high levels of cash to share owners in a dynamic, difficult and volatile environment.”
And PayPal (PYPL) said expenses rose more than expected as cash flow declined. Total operating expenses of $6.78 billion topped the Visible Alpha consensus of $6.24 billion, up from $6.26 billion in Q1.
But the company boosted guidance on the bottom line for the full year. It now expects 2025 non-GAAP EPS of $5.15-$5.30, compared with the $5.09 consensus and its previous guidance of $4.95-$5.10.
In other news of note, U.S. smartphone shipments rose by 1% in Q2 as vendors front-loaded inventory amid tariff concerns. Samsung (OTCPK:SSNLF) saw strong growth, but Apple (AAPL) saw a rare double-digit decline,
Research firm Canalys said Samsung shipped 8.3 million units in Q2, a 38% year-over-year increase, boosting its market share to 31% from 23%.
Apple’s shipments dropped 11% to 13.3 million units, down from 14.9 million a year earlier. Still, Apple retained the top position with a 49% share of the U.S. market, ahead of Samsung’s 31%.
Analysts at Canalys said vendors continue to front-load devices and maintain high inventory levels to best cope with the risk of tariffs. But just 1% growth overall indicated tepid demand in an increasingly pressured economic environment “and a widening gap between sell-in (to retailers) and sell-through (to customers).”
And Union Pacific (UNP) and Norfolk Southern (NSC) sealed their previously reported deal to create America’s first one-company transcontinental railroad.
The companies said they will seamlessly connect over 50,000 route miles across 43 states from the East Coast to the West Coast, linking approximately 100 ports and nearly every corner of North America. s.
Under the terms of the agreement, Union Pacific will acquire Norfolk Southern in a stock and cash transaction, implying a value for Norfolk Southern of $320 per share based on Union Pacific’s unaffected closing stock price on July 16. The value per share implies an enterprise value of $85 billion, resulting in the creation of a combined enterprise of over $250 billion.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
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