UnitedHealth Plunges, Lilly Gains on Weight-Loss Pill, Trump Slams Powell 4/17/25

SPEAKER_1 (0:00)

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David Faber (1:01)

Market insight and analysis, you're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (1:07)

Good Thursday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Wrapping up a holiday shortened week with a wave of news, the president trashes Powell as the ECB cuts for a seventh time. UNH is going to pinch the Dow by several hundred points as we watch Lilly, Amex, Nvidia, Horton, the regional banks and more. Our roadmap begins with UNH tumbling in the pre-market after this earnings miss, slashing its guidance due to some higher medical care costs.

David Faber (1:34)

On the flip side, shares of Eli Lilly, they're up sharply this after its experimental weight loss pill, pill being the key here. It met the company's goals in a late stage trial. There are more trials yet to come. Also this morning, President Trump takes to True Social to slam Jerome Powell this one day after the Fed shares remarks on the economy. The president posting, quote, Powell's termination cannot come fast enough.

Carl Quintanilla (2:00)

Let's begin with UnitedHealth. Those shares are on track for one of the worst gap opens, at least Jim, in about a quarter century.

Jim Cramer (2:07)

I am shocked. I mean, it wasn't just anyone divisionally. Remember Medical Advantage had been a culprit.

David Faber (2:15)

Medicare Advantage.

Jim Cramer (2:15)

Medicare Advantage. This is everything. I mean, Optum, the Optum health care system was wrong. I checked in with CVS with Edna. They reiterated recently.

David Faber (2:27)

Last week, CVS reiterated. They changed out their CFO and they reiterated.

Jim Cramer (2:31)

Yes.

David Faber (2:31)

Last week.

Jim Cramer (2:32)

I was just looking at the statement and I'm saying, wow, totally contrary. This is so unlike UNH. Now, of course, they said they can course correct and they've had it. There have been a couple of times maybe in the last 30 years where they missed this badly. But David, I'm not saying they took their eye off the ball. I'm saying they weren't in the stadium.

David Faber (2:50)

I know. The key here was not the current quarter that was reported. It was the fact that they took the year down by 12 percent in terms of EPS, and you see what's happening to the stock price. Last year, they really actually indicated to many that they were the calm and the storm.

Jim Cramer (3:10)

Right.

David Faber (3:10)

And that they managed expenses very well, and their assumptions for medical loss ratio were lower last year than others, such as CVS. And remember, we had so many of these managed care companies when it came to Medicare Advantage suddenly having to say, whoa, we missed it.

Jim Cramer (3:27)

Oh.

David Faber (3:28)

Seniors have been using a lot more medical care than we thought.

Jim Cramer (3:31)

Some people feel Karen Lynch lost her job for that, because she was from that division. CVS, in retrospect, how bad was she really?

David Faber (3:42)

And so, while you're going to see all the other names down, there they are, I think there is some question here as to whether this really is going to be shared pain or whether in fact this is a sort of a differential performance, poor performance by UNH in the same way that it actually outdid its competitors last year. Now, the company did run into issues in the stock market, obviously having to do with other things, but when it came to managing its medical loss ratio, Medicare Advantage, last year it seemed to Jim, as I said, and it's been termed to me that island of tranquility, while everybody else was having a huge issue. Remember Umana and as you point out, Etnet, CVS and others. Then there's one other question at least that was raised to me by somebody who follows it closely, the coding practices which have come under scrutiny. Have they stopped up coding as much? That can hit revenues, so it makes your MLR as a ratio obviously higher, because you have revenues that perhaps are coming in a bit.