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 more than 5% in premarket trading after the company reported better-than-expected quarterly earnings as the U.S. health insurer kept medical costs in check.
The company had set a far lower profit forecast in July after suspending its prior outlook in May, which had sent its shares reeling.
The healthcare 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 newly returned CEO Hemsley.
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 and Americans’ anger at the high price of health care.
He was brought in earlier this year as part of a management shakeup and has since replaced several long-time executives.
UnitedHealth said it continues to see elevated costs, which the industry has been struggling with for more than two years.
For the third 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%.
Shares of peers CVS Health, Humana and Elevance rose about 2% before the bell.
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.
—Sriparna Roy and Sneha S K, Reuters