Update Version 2 - Update 1 - UnitedHealth Group Raises Profit Forecast Again, Accelerates Efforts to Turn Business Profitable

Update stock price information and add more details on medical costs in paragraph 11

Amina Niasse

Reuters New York, Oct 13 - UnitedHealth Group (UNH.N) raised its 2026 earnings outlook for the third time on Tuesday, driven mainly by tighter health insurance medical cost spending and improved profit margins at its Optum clinical care and health technology units.

After facing one of the industry's most severe cyberattacks, missing financial targets, and being forced to withdraw outlook guidance, the company has spent the past two years in a period of business restructuring. Additionally, a major setback occurred nearly two years ago during an investor day event in New York, when an executive was fatally attacked.

UnitedHealth Group owns one of the largest health insurers in the U.S., clinical care operations, pharmacy services, and a pharmacy benefits manager. It now expects adjusted earnings per share to reach at least $20.50 for 2026, up from its prior forecast of at least $19.50 to $20.

According to data compiled by the London Stock Exchange Group (LSEG), analysts' average expectation for annual earnings per share is $19.86.

Mizuho Securities analyst Ann Hynes said that although UnitedHealth Group posted solid quarterly results, the real highlight was the resilience of the ongoing earnings margin recovery.

The stock rose 2.2% in premarket trading to $386.90.

According to LSEG data, UnitedHealth Group’s adjusted earnings per share for the quarter were $4.69, up from $2.92 a year earlier and above the analyst average estimate of $4.14.

Investors and analysts noted that the market will be closely watching the company's preliminary comments on 2027 guidance during the earnings call.

Cost Control

UnitedHealth Group reported that the third-quarter medical cost ratio—the percentage of premiums spent on medical care—was 88.4%, better than analyst expectations and lower than the 89.90% reported a year earlier.

The company attributed this improvement to adjustments in insurance plan designs and product pricing strategies. After missing its financial targets last year, the company has exited some health insurance products and appointed a new executive team this year.

The company stated that $610 million in reserves reduced medical costs in the quarter, reflecting lower-than-expected claims related to medical services provided earlier in the year.

Revenue at its insurance business, UnitedHealthcare, fell to $86.3 billion from $87.1 billion a year earlier, though operating profit and profit margins both rose as a result of benefit adjustments, pricing strategies, and control over medical and administrative costs.

UnitedHealthcare provides “Medicare Advantage” plans for adults aged 65 and over or people with disabilities, and operates “Medicaid” plans for low-income Americans on behalf of state governments.

The company said that, due to natural attrition, UnitedHealthcare saw a decrease of 165,000 enrollees in employer-sponsored health plans; another 85,000 lost Medicaid coverage due to eligibility changes.

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

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Year-on-year, UnitedHealth Group's third-quarter operating income rose to $6.6 billion from $4.3 billion, mainly due to operational improvements in its Optum Health clinical business.

UnitedHealth Group said technology investments have reduced the overall cost of delivering medical services. Optum terminated unfavorable contracts within certain health plans, which had previously weighed on first-quarter earnings.

Last year, the company stated that Optum faced regulatory and cost challenges which would result in $11 billion in losses to the unit over three years.

According to the London Stock Exchange Group (LSEG), third-quarter total revenue was $112.69 billion, beating analysts' median estimate of about $111.4 billion.

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