UnitedHealth Earnings Beat Wall Street Estimates. The Turnaround Continues.

UnitedHealth has said its Medicare membership contracted. (Patrick T. Fallon / AFP via Getty Images)

Key Points

• UnitedHealth Group beat Wall Street expectations for third-quarter earnings and raised its full-year adjusted earnings outlook.
• The company’s medical-cost ratio fell to 88.4%, lower than Wall Street’s forecast and the 89.9% recorded a year prior.
• UnitedHealth is serving 935,000 fewer seniors in its Medicare program compared with the end of 2025 after retooling its portfolio.

UnitedHealth Group beat Wall Street earnings expectations in the third quarter and raised its full-year outlook, as the healthcare giant continues to plow ahead on turnaround efforts after the stock plummeted last year.

UnitedHealth turned in adjusted earnings per share of $4.69, while analysts had called for $4.14, according to FactSet. Revenue reached $112.7 billion, ahead of a consensus estimate of $111.31 billion.

For the full year, UnitedHealth now forecasts adjusted earnings of at least $20.50 per share, up from a previous range of $19.50 to $20 per share.

Spending on medical costs—a pain point for large insurers in recent years—continued to show signs of improvement. UnitedHealth’s medical-cost ratio, which measures the portion of premium revenue paid out to cover medical claims, was 88.4%, lower than Wall Street’s forecast of 89.7% and lower than the 89.9% a year prior.

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In the company’s large Medicare portfolio, medical costs are moderating “pretty much across all major categories, with the exception of pharma, and specialty pharma in particular,” Chief Financial Officer Wayne DeVeydt told Barron’s.

DeVeydt cautioned however, that the cost trend has improved against a starting point that was already elevated. “Even with those improvements, it continues to be elevated against what we’ve seen in historical norms,” he said.

Results in the Optum Health unit—another focus of the turnaround—are also running ahead of pace, compared with full-year guidance of $2.215 billion in adjusted earnings from operations the company provided in the second quarter.

For the third quarter, Optum Health delivered $588 million in adjusted earnings from operations.

Preventive care that mitigates higher medical costs down the road is a key factor in Optum Health’s value-based care model. More people are seeing their primary care physicians and acute admissions are down, DeVeydt said. “We have a long way to go still,” said DeVeydt. “We’re laser focused on it.”

UnitedHealth’s stock spiral began in the spring of 2025 as the company navigated a bumpy road of higher medical costs. Shares lost nearly 35% last year.

The company brought back former CEO Stephen Hemsley to lead through the tumult, and retooled its Medicare Advantage portfolio to improve margins.

In the process, UnitedHealth has said Medicare membership contracted. Through the third quarter, it’s serving 935,000 fewer seniors in the program compared with year-end 2025.

Open enrollment beings this month for seniors choosing their Medicare plans for next year. DeVeydt said “growth is on the table for 2027” based on how the company is positioned.

Shares have gained 14.7% so far this year, just higher than the S&P 500’s 14% gain. The stock closed at $378.52 on Monday.

Write to Catherine Dunn at catherine.dunn@dowjones.com

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