UnitedHealth $UNH Group reported second-quarter results on Thursday that topped analyst expectations and raised its full-year profit outlook, as improved medical cost management and stronger performance at its Optum health services unit drove earnings higher.
UnitedHealth's adjusted earnings reached $6.38 per share for the quarter ended June 30, a sharp jump from $4.08 per share recorded in last year's comparable period. Analysts had expected $4.90 per share, according to CNBC. On a net basis, the company earned $5.48 billion, or $6.04 per share, against $3.41 billion, or $3.74 per share, a year earlier.
UnitedHealth now expects full-year 2026 adjusted earnings of $19.50 to $20.00 per share, up from its prior outlook of greater than $18.25 per share. The company kept its full-year revenue guidance unchanged at greater than $439 billion.
Revenue for the quarter reached $112.03 billion, edging up from $111.62 billion in the same three-month stretch last year. UnitedHealth's medical benefit ratio — the share of premiums paid out to cover medical expenses — fell to 86.7% from 89.4% a year earlier, a result the company tied to benefit redesigns, updated pricing, and ongoing cost controls.
Chief Financial Officer Wayne DeVeydt attributed the improvement in part to cost controls in the Medicare business and higher payments for Medicaid plans. He cautioned, however, that the gains do not signal a broader easing of industry-wide cost pressures. "These results are not a reflection of trend bending or coming under control, but rather our efforts to start pushing down what is already an elevated number," DeVeydt told CNBC.
UnitedHealthcare, the company's insurance unit, served 48.5 million people in the quarter, down 525,000 from the prior quarter. DeVeydt attributed the membership decline to affordability pressures from higher healthcare costs and forecast losses of roughly 500,000 ACA exchange members and 1.1 million Medicare Advantage members for the full year, according to Reuters. The company noted that premium increases have been large enough to keep overall revenue flat despite the drop in members.
Optum generated second-quarter revenues of $65.7 billion and earnings from operations of $4.0 billion, representing 160 basis points of margin expansion year over year. The unit supported more than 120 million consumers in the quarter.
UnitedHealth raised its full-year profit guidance earlier this year after a first-quarter beat, when adjusted earnings of $7.23 per share exceeded analyst estimates of $6.57 per share. At that time, the company lifted its adjusted earnings outlook to greater than $18.25 per share and maintained its revenue guidance of more than $439 billion.
Chief Executive Officer Stephen Hemsley, who returned to the helm last year following a period of financial and operational difficulty at the company, said in a statement that the results "reflect the continuing progress in our work to simplify how we operate, improve both affordability and the health care experience for patients and care providers and apply modern technology to create real improvement for people."
UnitedHealth stock rose about 7% in premarket trading on Thursday.