UnitedHealth Group Raises Earnings Guidance on Stronger Third Quarter Results

By Amina Niasse

NEW YORK, Oct 13 (Reuters) – UnitedHealth Group (UNH) raised its 2026 profit forecast on Tuesday as the company tightened medical spending in its health insurance business and improved margins in its Optum clinical care and health technology units.

Shares of the company rose 2.5% to $395.50 in pre-market trading.

On an adjusted basis, UnitedHealth earned $4.69 per share in the third quarter, up from $2.92 a year earlier, compared with analysts’ average estimate of $4.14, according to data compiled by LSEG.

UnitedHealth now expects adjusted earnings per share of at least $20.50 for 2026, up from a previous forecast of at least $19.50 to $20.

Analysts had expected UnitedHealth, which operates one of the largest U.S. health insurance companies, clinical care businesses, pharmacy services and a pharmacy benefits manager, to post earnings of $19.86 per share for 2026, according to data compiled by LSEG.

UnitedHealth has experienced a turnaround over the past two years after suffering the largest healthcare cyberattack on record, missing its financial targets and being forced to withdraw its outlook. It was also shaken by the assassination of a top executive at the company’s investor day in New York nearly two years ago.

COST CONTROL

UnitedHealth reported a third-quarter medical cost ratio – the percentage of insurance premiums spent on medical care – of 88.4%, better than analyst estimates and the prior year’s 89.90%.

The company attributed the improvement to plan design and new product pricing. The company dropped some health insurance products this year and named new senior executives after missing financial estimates last year.

Insurance industry revenue fell to $86.3 billion from $87.1 billion a year earlier, even as operating profits and profit margins rose due to changes in benefits, pricing and medical and operating cost controls.

UnitedHealthcare operates Medicare Advantage health insurance plans for adults age 65 and older or disabled and also manages Medicaid plans for low-income Americans on behalf of state governments.

The company said UnitedHealthcare membership declined by 165,000 people in its employer-sponsored health plan business due to attrition and another 85,000 people left Medicaid rolls because of eligibility changes.

Since the end of 2025, 935,000 members have left its Medicare Advantage business.

INCOMES ON THE RISE

On an annual basis, UnitedHealth’s third-quarter operating profit rose to $6.6 billion, up from $4.3 billion in the year-ago quarter, largely due to improved operations at its Optum Health clinical unit.

UnitedHealth said the technology investments made by the company have reduced the overall costs of providing medical services. Optum terminated less favorable contracts for some health plans that had weighed on profits in the first quarter.

Last year, the company said Optum was facing regulatory and cost issues, representing an $11 billion hit to the unit over three years.

Overall third-quarter revenue fell to $112.694 billion from $113.161 billion, the company said. This exceeded analysts’ expectations, which were around $111 billion, according to LSEG.

(Reporting by Amina Niasse; editing by Caroline Humer and Sonali Paul)