By Amina Niasse
NEW YORK, Oct 13 (Reuters) - UnitedHealth Group on Tuesday raised its 2026 profit forecast for the third time this year on tightened medical cost spending in its health insurance business and improved margins in its Optum clinical care and health technology units.
The company has been on a turnaround for the past two years after it suffered one of the biggest cyber attacks on the industry, missed financial targets and was forced to withdraw its outlook. It was also rattled by the killing
of a top executive outside the company's investor day in New York nearly two years ago.
UnitedHealth, which operates one of the largest US health insurance companies, clinical care businesses, pharmacy services and a pharmacy benefits manager, now expects 2026 adjusted profit per share of at least $20.50, compared with its previous forecast of at least $19.50 to $20.
Analysts' average estimate for annual profit stood at $19.86 per share, according to data compiled by LSEG.
While UnitedHealth delivered a solid quarter, the real highlight was the continued durability of the margin recovery story, said Mizuho analyst Ann Hynes.
Shares of the company were up 2.2% at $386.90 in premarket trading.
On an adjusted basis, UnitedHealth earned a quarterly profit of $4.69 per share, up from $2.92 a year earlier, and higher than the average analyst estimate of $4.14, according to data compiled by LSEG.
Initial commentary on 2027 guidance on the company's earnings call will be closely monitored, investors and analysts noted.
COST CONTROLS
UnitedHealth reported a third-quarter medical cost ratio — the percentage of insurance premiums spent on medical care — of 88.4%, better than analysts' estimates and the year earlier's 89.90%.
The company attributed the improvement to plan design and new pricing on products. It has exited some health insurance products this year and has named new top executives after missing financial estimates last year.
A $610 million reserve benefit reduced medical costs during the quarter, reflecting lower-than-expected medical cost claims for services provided earlier this year, the company said.
Revenue from UnitedHealthcare, it insurance business, fell to $86.3 billion from $87.1 billion a year earlier even as earnings from operations and profit margins rose due to benefit changes, pricing, and medical and operating cost controls.
UnitedHealthcare operates Medicare Advantage health insurance plans for adults aged 65 and older or who have disabilities and also runs Medicaid plans for low-income Americans on behalf of state governments.
The company said that UnitedHealthcare membership declined in its employer-sponsored health plan business by 165,000 people due to attrition and another 85,000 people left the Medicaid rolls due to eligibility changes.
Since the end of 2025, 935,000 members have exited its Medicare Advantage business.
On a yearly basis, third-quarter operating income for UnitedHealth rose to $6.6 billion from $4.3 billion in the year-ago quarter, largely driven by improved operations in its Optum Health clinical unit.
UnitedHealth said technological investments the company has made have reduced the overall costs of providing medical services. Optum exited less favorable contracts for certain health plans that had dragged on earnings in the first quarter.
The company last year said Optum faced regulatory and cost challenges, representing an $11 billion blow to the unit over three years.
Overall third-quarter revenue of $112.69 billion beat analyst expectations of about $111.4 billion, according to LSEG.
(Reporting by Amina Niasse, Sneha S K and Christy Santhosh; editing by Caroline Humer, Sonali Paul and Shinjini Ganguli)
