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UNH Tops Q3 Earnings on Lower Medical Costs, Raises '26 Outlook
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Key Takeaways
UnitedHealth's Q3 adjusted EPS rose 60.6% to $4.69, beating estimates on lower medical costs.
The adjusted MCR improved 150 bps to 88.4%, while operating earnings climbed 45.2% to $6.3 billion.
UnitedHealth raised its 2026 adjusted EPS outlook to at least $20.50, from its prior range of $19.50-$20.
UnitedHealth Group, Inc. (UNH - Free Report) reported third-quarter 2026 adjusted earnings per share (EPS) of $4.69, which beat the Zacks Consensus Estimate of $4.12. The bottom line rose 60.6% year over year.
Revenues declined 0.4% year over year to $112.7 billion. However, the top line beat the consensus mark by 1.2%.
The quarterly results were aided by the strength witnessed in Optum Insight and Optum Rx. Medical cost management, pricing discipline and benefit design changes also contributed to the upside. However, weakness in Optum Health and declining memberships partially offset the positives.
UnitedHealth Group Incorporated Price, Consensus and EPS Surprise
UnitedHealth’s third-quarter premium of $87.1 billion decreased from $89 billion a year ago but beat the consensus mark of $86 billion.
UNH’s adjusted medical care ratio (MCR) was 88.4% in the third quarter, which improved 150 bps from the year-ago period. MCR witnessed a decrease, backed by solid medical cost management, pricing discipline and benefit design changes. Medical costs of $77 billion declined from $80 billion a year ago.
Third-quarter total operating costs of $106.1 billion decreased 2.5% year over year, benefiting from lower medical costs and operating costs. However, the figure was higher than our model estimate of $104.5 billion. The third-quarter 2026 operating cost ratio improved to 12.8% from 13.5% a year ago.
UnitedHealth’s adjusted operating earnings rose 45.2% year over year to $6.3 billion in the third quarter.
UNH’s Business Platforms
Revenues of the health benefits business of UnitedHealth, UnitedHealthcare, declined 0.8% year over year to $86.3 billion in the third quarter. However, the metric beat the Zacks Consensus Estimate of $84.7 billion and our estimate of $82.8 billion. The UnitedHealthcare business catered to 48.3 million people as of Sept. 30, 2026, which fell 3.6% year over year.
Adjusted earnings from operations amounted to $2.7 billion, up from $1.8 billion a year ago. The adjusted operating margin increased to 3.1% from 2.1% a year ago.
Revenues in the Optum business line were $66.9 billion, which fell from $69.2 billion a year ago due to lower contribution from Optum Health. The figure missed the consensus mark of $67.1 billion. Optum’s adjusted earnings from operations rose to $3.6 billion from $2.5 billion a year ago. The adjusted operating margin of 5.3% increased from 3.6%.
UNH’s Financial Position (As of Sept. 30, 2026)
UnitedHealth exited the third quarter with cash and short-term investments of $28.5 billion, which rose from the 2025-end level of $28.1 billion. Total assets of $312.8 billion increased from the $309.6 billion figure at 2025-end.
Long-term debt, less current maturities, amounted to $68.7 billion, down from the $72.3 billion figure as of Dec. 31, 2025. Short-term borrowings and the current maturities of long-term debt were $5.6 billion.
Total equity of $104.1 billion advanced from the 2025-end level of $100.1 billion.
UnitedHealth generated operating cash flows of $25.1 billion in the first nine months of 2026, which grew from the prior-year figure of $18.6 billion. In the first nine months of 2026, it paid dividends worth $6.2 billion and repurchased $5 billion of stock.
UNH’s Revised 2026 Outlook
Management earlier anticipated revenues for 2026 above $439 billion, which are below the 2025 level due to planned right-sizing across operations. Adjusted EPS is now expected to be at least $20.5 for 2026, up from the previously guided range of $19.5-$20, indicating improving margins. Net margin was expected to be around 3.6%, up from 2.7% in 2025.
The company earlier expected MCR to be 88.1% (± 25 bps) in 2026, down from 89.1% in 2025. The operating cost ratio was likely to be 12.8% (± 50 bps) in 2026. The tax rate was expected to be around 18.5%.
Operating cash flows were estimated to be around $24 billion, up from the previous guidance of greater than $18 billion. UNH was expected to make repurchases of at least $5 billion and pay dividends worth $8 billion in 2026. Capital expenditure was estimated at $3.8 billion for the year.
Furthermore, management earlier expected medical memberships to be within 46.945-47.495 million in 2026, with significant declines in commercial risk, Medicare Advantage and Medicaid heads.
The Zacks Consensus Estimate for Phibro Animal Health’s current-quarter earnings is pegged at 77 cents per share, suggesting 5.5% year-over-year growth. PAHC beat earnings estimates in each of the trailing four quarters, with the average surprise being 18.4%. The consensus estimate for current-quarter revenues is pegged at $376.1 million, suggesting 3.4% year-over-year growth.
The Zacks Consensus Estimate for Corcept Therapeutics’ current-quarter earnings of 68 cents per share has remained stable over the past seven days. CORT beat earnings estimates in one of the trailing four quarters, met once and missed twice. The consensus estimate for current-quarter revenues is pegged at $329.2 million, suggesting 58.5% year-over-year growth.
The Zacks Consensus Estimate for TG Therapeutics’ current-quarter earnings of 37 cents per share has witnessed one upward revision in the past seven days, against no movement in the opposite direction. The consensus estimate for TGTX’s current-quarter revenues is pegged at $247.2 million, suggesting 52.8% year-over-year growth.
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UNH Tops Q3 Earnings on Lower Medical Costs, Raises '26 Outlook
Key Takeaways
UnitedHealth Group, Inc. (UNH - Free Report) reported third-quarter 2026 adjusted earnings per share (EPS) of $4.69, which beat the Zacks Consensus Estimate of $4.12. The bottom line rose 60.6% year over year.
Revenues declined 0.4% year over year to $112.7 billion. However, the top line beat the consensus mark by 1.2%.
The quarterly results were aided by the strength witnessed in Optum Insight and Optum Rx. Medical cost management, pricing discipline and benefit design changes also contributed to the upside. However, weakness in Optum Health and declining memberships partially offset the positives.
UnitedHealth Group Incorporated Price, Consensus and EPS Surprise
UnitedHealth Group Incorporated price-consensus-eps-surprise-chart | UnitedHealth Group Incorporated Quote
Q3 Business Performance of UNH
UnitedHealth’s third-quarter premium of $87.1 billion decreased from $89 billion a year ago but beat the consensus mark of $86 billion.
UNH’s adjusted medical care ratio (MCR) was 88.4% in the third quarter, which improved 150 bps from the year-ago period. MCR witnessed a decrease, backed by solid medical cost management, pricing discipline and benefit design changes. Medical costs of $77 billion declined from $80 billion a year ago.
Third-quarter total operating costs of $106.1 billion decreased 2.5% year over year, benefiting from lower medical costs and operating costs. However, the figure was higher than our model estimate of $104.5 billion. The third-quarter 2026 operating cost ratio improved to 12.8% from 13.5% a year ago.
UnitedHealth’s adjusted operating earnings rose 45.2% year over year to $6.3 billion in the third quarter.
UNH’s Business Platforms
Revenues of the health benefits business of UnitedHealth, UnitedHealthcare, declined 0.8% year over year to $86.3 billion in the third quarter. However, the metric beat the Zacks Consensus Estimate of $84.7 billion and our estimate of $82.8 billion. The UnitedHealthcare business catered to 48.3 million people as of Sept. 30, 2026, which fell 3.6% year over year.
Adjusted earnings from operations amounted to $2.7 billion, up from $1.8 billion a year ago. The adjusted operating margin increased to 3.1% from 2.1% a year ago.
Revenues in the Optum business line were $66.9 billion, which fell from $69.2 billion a year ago due to lower contribution from Optum Health. The figure missed the consensus mark of $67.1 billion. Optum’s adjusted earnings from operations rose to $3.6 billion from $2.5 billion a year ago. The adjusted operating margin of 5.3% increased from 3.6%.
UNH’s Financial Position (As of Sept. 30, 2026)
UnitedHealth exited the third quarter with cash and short-term investments of $28.5 billion, which rose from the 2025-end level of $28.1 billion. Total assets of $312.8 billion increased from the $309.6 billion figure at 2025-end.
Long-term debt, less current maturities, amounted to $68.7 billion, down from the $72.3 billion figure as of Dec. 31, 2025. Short-term borrowings and the current maturities of long-term debt were $5.6 billion.
Total equity of $104.1 billion advanced from the 2025-end level of $100.1 billion.
UnitedHealth generated operating cash flows of $25.1 billion in the first nine months of 2026, which grew from the prior-year figure of $18.6 billion. In the first nine months of 2026, it paid dividends worth $6.2 billion and repurchased $5 billion of stock.
UNH’s Revised 2026 Outlook
Management earlier anticipated revenues for 2026 above $439 billion, which are below the 2025 level due to planned right-sizing across operations. Adjusted EPS is now expected to be at least $20.5 for 2026, up from the previously guided range of $19.5-$20, indicating improving margins. Net margin was expected to be around 3.6%, up from 2.7% in 2025.
The company earlier expected MCR to be 88.1% (± 25 bps) in 2026, down from 89.1% in 2025. The operating cost ratio was likely to be 12.8% (± 50 bps) in 2026. The tax rate was expected to be around 18.5%.
Operating cash flows were estimated to be around $24 billion, up from the previous guidance of greater than $18 billion. UNH was expected to make repurchases of at least $5 billion and pay dividends worth $8 billion in 2026. Capital expenditure was estimated at $3.8 billion for the year.
Furthermore, management earlier expected medical memberships to be within 46.945-47.495 million in 2026, with significant declines in commercial risk, Medicare Advantage and Medicaid heads.
UNH’s Zacks Rank & Other Key Picks
UNH currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space are Phibro Animal Health Corporation (PAHC - Free Report) , Corcept Therapeutics Incorporated (CORT - Free Report) and TG Therapeutics, Inc. (TGTX - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Phibro Animal Health’s current-quarter earnings is pegged at 77 cents per share, suggesting 5.5% year-over-year growth. PAHC beat earnings estimates in each of the trailing four quarters, with the average surprise being 18.4%. The consensus estimate for current-quarter revenues is pegged at $376.1 million, suggesting 3.4% year-over-year growth.
The Zacks Consensus Estimate for Corcept Therapeutics’ current-quarter earnings of 68 cents per share has remained stable over the past seven days. CORT beat earnings estimates in one of the trailing four quarters, met once and missed twice. The consensus estimate for current-quarter revenues is pegged at $329.2 million, suggesting 58.5% year-over-year growth.
The Zacks Consensus Estimate for TG Therapeutics’ current-quarter earnings of 37 cents per share has witnessed one upward revision in the past seven days, against no movement in the opposite direction. The consensus estimate for TGTX’s current-quarter revenues is pegged at $247.2 million, suggesting 52.8% year-over-year growth.