A UnitedHealthcare sign is displayed on its office building in Minnetonka, Minnesota, U.S., on Dec. 11, 2025.
Tim Evans | Reuters
UnitedHealth Group on Tuesday posted first-quarter earnings that beat estimates and raised its 2026 profit outlook as the company better manages high medical costs and streamlines its operations.
The nation's largest private insurer said it expects 2026 adjusted earnings of more than $18.25 per share, down from a previous outlook of more than $17.75 per share. UnitedHealth is maintaining its full-year revenue guidance of more than $439 billion, which the company said in January reflects “right sizing across the business.”
Here's what the company reported for the first quarter compared to what Wall Street expected, according to a survey of analysts by LSEG:
- Earnings per share: Adjusted $7.23 vs. expected $6.57
- Revenue: $111.72 billion vs. $109.57 billion expected
Shares rose about 8% in morning trading Tuesday.
UnitedHealth has a new leadership team to carry out a recovery plan. The strategy involves reducing membership, selling the business of its Optum healthcare unit in the UK, investing heavily in artificial intelligence, optimizing access to care and increasing transparency to restore profitability (along with the company's reputation) after a series of hurdles over the past two years.
The company posted first-quarter net income of $6.28 billion, or $6.90 per share, compared with $6.29 billion, or $6.85 per share, in the same period a year earlier. Excluding items such as business divestitures, restructuring and the expected reduction in reserves for unprofitable contracts, UnitedHealth earned $7.23 per share.
Revenue rose to $111.72 billion from $109.58 billion in the prior-year quarter. The company's insurer, UnitedHealthcare, and Optum beat analysts' sales estimates for the quarter, according to StreetAccount.
In particular, UnitedHealth appears to have a better handle on higher medical costs, an issue that has plagued the broader insurance industry for more than two years. Insurers, particularly those that administer private Medicare plans, have been hit by an influx of people seeking care and delayed high-cost, post-pandemic specialty drugs like GLP-1s, among other factors.
UnitedHealth's medical benefit ratio (a measure of total medical expenses paid relative to premiums collected) was 83.9% during the first quarter. That's an improvement from the 84.8% reported in the same period last year. A lower ratio generally indicates that the company collected more in premiums than it paid in profits, resulting in higher profitability.
Analysts expected a ratio of 85.5% for the quarter, according to StreetAccount.
In a statement, UnitedHealth said the first-quarter ratio reflects its strong management of medical costs and the release of funds previously reserved for unprofitable Optum contracts. But that improvement was partially offset by “consistently elevated” medical costs, the company said.
“We continue to help simplify and modernize health care for the people and care providers we serve, delivering greater value, affordability, transparency and connectivity,” UnitedHealth CEO Stephen Hemsley said in the statement.
The results come just weeks after the Trump administration finalized a 2027 payment rate increase for Medicare Advantage plans that was much larger than initially proposed, in a boost for UnitedHealth and other health insurer stocks.
Questions about obesity drug coverage
The company also raised new questions about insurers' involvement in the Trump administration's plans for Medicare coverage of obesity drugs next year.
Insurers had until Monday to notify the federal government if they would join the program, which would cover the popular GLP-1 treatments of Eli Lilly and Nordisk. While UnitedHealth, the largest provider of privately run Medicare Advantage plans, has not explicitly said whether it will participate, its willingness to do so is critical for the program to move forward.
“We would like to find a path forward, yes, on coverage over time, but there are some notable challenges and lingering questions with the currently planned structure,” Bobby Hunter, head of government programs at UnitedHealth, said on the company's earnings conference call. “So, we are still working through that process internally and look forward to continuing the dialogue with CMS.”
A spokesperson for the Department of Health and Human Services did not immediately respond to a request for comment.
