UnitedHealth Group raised its 2026 profit forecast on Tuesday after reporting higher earnings and revenue. It said restrained medical spending and better clinical-care margins are helping its financial recovery. The company now expects adjusted profit of at least $20.50 per share, above its previous forecast of $19.50 to $20 and analysts’ estimate of $19.86.
Adjusted third-quarter earnings came to $4.69 per share, up from $2.92 a year earlier and above the average analyst estimate of $4.14. Revenue reached $112.69 billion, topping analyst expectations of about $111.4 billion. UnitedHealth shares rose 2.1% to $386.61 in early trading.
Margins and medical spending
UnitedHealth’s third-quarter medical cost ratio fell to 88.4%, from 89.90% a year earlier, and came in below analysts’ estimates. The ratio measures the share of insurance premiums spent on medical care; a lower figure means less premium revenue went to care during the quarter.
The company credited changes in plan design and new product pricing for the improvement. It also said controls on medical and operating costs lifted operating earnings and profit margins in its insurance business. A $610 million reserve benefit further lowered reported medical costs, reflecting fewer-than-expected claims for services provided earlier this year.
UnitedHealthcare, the insurance business, brought in $86.3 billion in revenue, down from $87.1 billion a year earlier, even as operating earnings and margins rose. It runs Medicare Advantage plans for adults aged 65 and older, along with Medicaid plans for low-income Americans on behalf of state governments.
Membership fell in several parts of the business. The employer-sponsored health plan business lost 165,000 people through attrition, while 85,000 people left Medicaid rolls after eligibility changes. Since the end of 2025, 935,000 members have left UnitedHealthcare’s Medicare Advantage business.
Clinical operations and the forecast
UnitedHealth’s overall operating income climbed to $6.6 billion from $4.3 billion in the year-ago quarter, largely on better operations at Optum Health, its clinical unit. The company said technology investments, including artificial intelligence, cut the overall costs of providing medical services.
Optum also left less favorable contracts for certain health plans that had weighed on first-quarter earnings. Last year, UnitedHealth said regulatory and cost challenges had dealt the unit an $11 billion blow over three years.
Chief Financial Officer Wayne Deveydt said UnitedHealth was targeting the lower end of its long-term growth-rate projection, 13% to 16%, as a “reasonable starting point” for 2027. “Current analyst consensus for 2027 may understate the opportunity ahead,” he said. Wall Street analysts estimate earnings of $22.61 per share next year.
Mizuho analyst Ann Hynes said that while UnitedHealth delivered a solid quarter, “the real highlight was the continued durability of the margin recovery story.” The company has spent the past two years in turnaround mode after one of the industry’s biggest cyber attacks, missed financial targets and a forced withdrawal of its outlook. It named new top executives and left some health insurance products this year after missing financial estimates last year. The killing of a top executive outside its investor meeting in New York nearly two years ago rattled the company.