UnitedHealth Group Inc. (UNH) reported better-than-expected third-quarter earnings and revenue on Tuesday and raised its full-year 2026 earnings guidance.
CEO Stephen Hemsley said the results reflected stronger execution and operational discipline as the company works to simplify health care for patients and providers.
Adjusted earnings came in at $4.69 per share, beating the analyst consensus estimate of $4.15.
Revenue totaled $112.694 billion, exceeding Wall Street expectations of $111.403 billion.
Medical Costs and Operating Efficiency Improve
UnitedHealth's medical care ratio (MCR) improved to 88.4% from 89.9% a year earlier. The decline reflected better medical cost management, improved pricing and benefits alignment, and enhancements in care delivery.
The ratio also benefited from $610 million in favorable prior-period reserve development related to 2026 dates of service.
Meanwhile, the operating cost ratio fell to 12.8% from 13.5% a year earlier as UnitedHealth continued to modernize operations and streamline administrative processes.
UnitedHealthcare and Optum Performance
UnitedHealthcare's third-quarter revenue declined to $86.3 billion from $87.1 billion a year earlier. The insurance business served 48.3 million people during the quarter.
Optum Health revenue fell 10% year over year to $22.9 billion. The decline reflected fewer value-based care patients in markets where Optum lacked the scale needed to support its clinicians.
In contrast, Optum Insight revenue rose 3% to $5.5 billion, while Optum Rx generated $39.9 billion in revenue.
In September, UnitedHealth sold a stake in certain Florida-based Optum Health operations to private equity firm TPG Inc. (NASDAQ: TPG).
The transaction formed part of UnitedHealth's broader effort to improve Optum's profitability following last year's sharp earnings downturn.
UnitedHealth Raises 2026 Earnings Outlook
UnitedHealth raised its full-year 2026 adjusted earnings guidance to at least $20.50 per share from its previous range of $19.50 to $20. The revised outlook exceeds the analyst consensus estimate of $19.86.
The company also increased its GAAP earnings forecast to at least $19.50 per share, up from its previous guidance of $18.45 to $18.95. Analysts had expected $18.35 per share.
UnitedHealth executives said they expect both favorable and unfavorable factors to influence performance in 2027.
However, management believes current analyst consensus estimates may "understate the opportunity ahead" and views the lower end of its long-term earnings growth target of 13% to 16% as a more reasonable starting point for its 2027 earnings per share forecast.
Executives said medical care intensity remains above historical levels, although trends are showing signs of stabilization.
The company also expects 2026 to mark a low point for its core Medicaid margins, which it projects will be slightly better than negative 1%.
UNH Price Action: UnitedHealth Group shares rose 4.39% to $395.13 in Tuesday's premarket trading, according to market data.
