UnitedHealth lifts profit forecast after stronger second quarter
UnitedHealth raised its 2026 adjusted earnings outlook after quarterly profit beat Wall Street expectations and medical costs improved.
By Hana Yoshida · Markets Reporter
3 min read
UnitedHealth Group raised its full-year profit forecast Thursday after reporting second-quarter earnings and revenue above Wall Street expectations. The results matter for the health insurance sector because UnitedHealth said it is making progress on costs that have pressured insurers for more than two years.
The company said it now expects 2026 adjusted earnings of $19.50 to $20 a share, compared with its earlier forecast of more than $18.25 a share. UnitedHealth kept its full-year revenue outlook at more than $439 billion, though Chief Financial Officer Wayne DeVeydt told CNBC he expects the company to exceed that level after the quarter’s performance.
UnitedHealth reported adjusted earnings of $6.38 a share for the second quarter, above the $4.90 expected by analysts surveyed by LSEG. Revenue was $112.03 billion, compared with the $110.85 billion estimate, according to LSEG.
Net income rose to $5.48 billion, or $6.04 a share, from $3.41 billion, or $3.74 a share, a year earlier, UnitedHealth said. The company said adjusted earnings exclude items including divestitures, restructuring costs and an expected reduction in reserves tied to unprofitable contracts.
Cost controls and AI spending
CNBC reported that UnitedHealth is trying to repair margins after restructuring and management changes. The company has been cutting membership, leaving contracts it considers unprofitable and investing $1.5 billion in artificial intelligence to make operations more efficient, according to CNBC.
DeVeydt told CNBC that medical costs are still above past levels. He said the quarter reflected UnitedHealth’s work to reduce an already high cost base, rather than a broad easing of industry medical trends.
DeVeydt said UnitedHealth is using AI to speed tasks such as prior authorizations and to improve payment accuracy by spotting possible fraud, waste and abuse. He told CNBC that AI tools are not making decisions on whether care is approved or denied.
The company’s medical benefit ratio was 86.7% in the quarter, UnitedHealth said. StreetAccount said analysts had expected 88.5%, while CNBC reported the ratio was 89.4% in the same period last year. A lower ratio means the insurer paid a smaller share of premiums toward medical benefits.
Enrollment pressure remains
UnitedHealth said higher medical costs are pushing insurers to raise premiums and change benefits, contributing to membership declines in Affordable Care Act exchange plans and Medicare Advantage plans run by private insurers. The company said revenue has held steady because higher pricing has offset lower enrollment.
DeVeydt told CNBC that this trend is not healthy for the system over the long term. UnitedHealthcare served 48.5 million people in the second quarter, down 525,000 from the prior quarter, the company said.
DeVeydt attributed the membership decline largely to affordability pressures tied to higher health-care costs. He forecast losses of about 500,000 exchange members and 1.1 million Medicare Advantage members in 2026, according to CNBC.
CNBC reported that insurers, especially Medicare Advantage operators, have faced higher use of care that patients delayed after the pandemic, along with costly specialty drugs such as GLP-1 medicines. UnitedHealth’s Optum health-care unit and UnitedHealthcare insurance business both exceeded analysts’ sales estimates for the quarter, according to StreetAccount.
The results come about a year after UnitedHealth disclosed Department of Justice investigations into its Medicare billing practices, CNBC reported. DeVeydt told CNBC the company had no update and continues to support the investigation.
This story draws on original reporting from CNBC.