By Sriparna Roy and Sneha S K (Reuters) -UnitedHealth Group raised its annual profit forecast on Tuesday and said it aims to grow in 2026, in a sign that turnaround efforts under new CEO Stephen Hemsley were gaining steam. UnitedHealth shares were up more than 4% in premarket trading after its third-quarter earnings exceeded Wall […]
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UnitedHealth lifts 2025 profit forecast, aims for growth in 2026
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By Sriparna Roy and Sneha S K
(Reuters) -UnitedHealth Group raised its annual profit forecast on Tuesday and said it aims to grow in 2026, in a sign that turnaround efforts under new CEO Stephen Hemsley were gaining steam.
UnitedHealth shares were up more than 4% in premarket trading after its third-quarter earnings exceeded Wall Street expectations as the U.S. health insurer kept medical costs in check.
Hemsley, who returned as CEO in May after leading the company from 2006 to 2017, has been working to regain investor and consumer trust after a difficult period for UnitedHealth that included the murder of a top executive, an unexpected surge in medical costs, a federal probe, and Americans’ anger at insurance industry practices.
He was brought in as a part of a management shakeup after the company’s first earnings miss in over a decade in April.
The company now sees 2025 adjusted profit of at least $16.25 per share, up from its previous forecast of at least $16.00, and above analysts’ estimate of $16.20 a share, according to LSEG data.
“The management is being smart here with being deliberate and conservative and they just don’t want to put themselves in a position where they have to cut the guidance again,” said James Harlow, senior vice president at Novare Capital Management, adding that the modest forecast raise at least “signals a floor for investors to kind of work off of.”
The company is focused on strengthening performance and positioning itself for “durable and accelerating growth in 2026 and beyond,” said Hemsley.
Analysts on average expect 2026 profit of $17.59 per share.
Shares of rivals CVS Health and Elevance rose 2%.
MEDICAL COSTS REMAIN ELEVATED
The healthcare conglomerate said it continues to see elevated costs, which the industry has been struggling with for more than two years.
UnitedHealth has begun the process of cleaning up the business under new management, and the results suggest trends are on track, said Oppenheimer analyst Michael Wiederhorn.
For the third quarter, the company’s medical loss ratio – the percentage of premiums spent on medical care – stood at 89.9%, in line with company expectations and analysts’ estimates of 89.87%. Health insurers typically aim for a ratio closer to 80%.
Quarterly revenue at the Optum health services unit was flat compared with a year ago 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 $2.92 per share for the quarter, beating analysts’ average estimate by 13 cents.
(Reporting by Sriparna Roy and Sneha S K in Bengaluru; Editing by Shinjini Ganguli and Bill Berkrot)