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UnitedHealth lifts 2025 profit forecast, aims for growth in 2026
Cheng Xin | Getty Images News | Getty Images
UnitedHealth on Tuesday raised its annual profit forecast and said it aims to grow in 2026, in a sign that the turnaround efforts under new CEO Stephen Hemsley were gaining steam.
Shares of the company rose over 3% in premarket trading after third-quarter earnings came ahead of Wall Street expectations as the U.S. health insurer kept medical costs in check.
Hemsley, who was at the helm of the company from 2006 to 2017, has been working to regain investor and consumer trust in the wake of an unexpected surge in medical costs, a federal probe and Americans’ anger at the high price of health care.
He was brought in May as a part of a management shakeup after the company’s first earnings miss in over a decade in April.
“We view this result and slight raise as a sign of stability in an organization that has experienced anything but stability over the past year,” said Morningstar analyst Julie Utterback.
The health-care giant now sees 2025 adjusted profit per share to be at least $16.25, compared with its previous estimate of at least $16.00, and above analysts’ estimate of $16.20 per share, according to data compiled by LSEG.
“We remain focused on strengthening performance and positioning for durable and accelerating growth in 2026 and beyond, and our results this quarter reflect solid execution toward that goal,” said Hemsley.
Shares of peers CVS Health and Elevance Health rose 1.5% before the bell.
Medical costs remain elevated
UnitedHealth said it continues to see elevated costs, which the industry has been struggling with for more than two years.
“One quarter doesn’t make a trend, but we see this Q3 print as a first step towards returning to UnitedHealth’s historical expectations management,” said J.P. Morgan analyst Lisa Gill.
For the quarter ended September 30, the company’s medical loss ratio — the percentage of premiums spent on medical care — stood at 89.9%, in line with the company’s expectations. Insurers aim for a ratio close to around 80%.
Analysts, on average, had expected the company to report a ratio of 89.87%.
UnitedHealth’s quarterly revenue at its Optum health services unit was flat year-over-year at $25.9 billion.
Revenue at Optum Rx, UnitedHealth’s pharmacy benefit manager, rose 16% to $39.7 billion, partly helped by higher prescription volumes.
On an adjusted basis, the company earned a profit of $2.92 per share for the quarter, beating analysts’ average estimate of $2.79.
