By Amina Niasse <\/p>\n
NEW YORK, July 16 (Reuters) – UnitedHealth Group raised on Thursday its 2026 profit forecast as the company tightened spending on medical costs and improved operating income in its Optum health services business. <\/p>\n
Shares of the \u200chealthcare giant rose nearly 5% before the bell. <\/p>\n
Chief Financial Officer Wayne DeVeydt said cost controls in the Medicare health \u200cinsurance business and increases in payments for Medicaid plans for low-income Americans helped second-quarter results. <\/p>\n
On an adjusted basis, UnitedHealth earned $6.38 per share in the second quarter, \u200bcompared with an average analyst estimate of $4.90, according to data compiled by LSEG. <\/p>\n
“These results are not a reflection of a trend bending or coming under control, but rather our efforts to start pushing down what is already an elevated number,” said DeVeydt. <\/p>\n
UnitedHealth now expects 2026 adjusted profit per share of $19.50 to $20.00 compared with its original forecast of at least $17.75. Analysts expect profit of $18.47 per share for 2026, according \u200cto data compiled by LSEG. <\/p>\n
CEO Stephen Hemsley returned \u2060to the helm last year after the health insurance company missed financial estimates and suffered a nationally disruptive ransomware attack, and after a top executive was killed outside its investor meeting. <\/p>\n
Hemsley has refocused \u2060the organization and refreshed half of its top leadership, exited some health insurance products, and committed $1.5 billion to invest in artificial intelligence. <\/p>\n
COST CONTROLS <\/p>\n
UnitedHealth reported a second-quarter medical cost ratio – the percentage of premiums spent on medical care – of 86.70%, better than analysts’ estimate of 88.47% and the \u200byear earlier’s \u200b89.4%. <\/p>\n
Health insurance unit UnitedHealthcare reported second-quarter revenue of $86 billion compared with $86.1 \u200bbillion in the same quarter last year, while overall \u200crevenue rose to $112 billion from $111.6 billion. That beat analyst expectations of about $111 billion, according to LSEG. <\/p>\n
The company said insurance plan design changes and new pricing on products led to improvement in its medical cost ratio. <\/p>\n
Higher costs for insurance drove membership decline, particularly for people purchasing plans through the Obamacare marketplace, where extra pandemic-era government subsidies expired, said DeVeydt. <\/p>\n
UnitedHealthcare expects 500,000 people to disenroll from Obamacare plans in 2026, DeVeydt said. <\/p>\n
The company kept its overall revenue outlook for 2026 unchanged at $439 billion, DeVeydt said. <\/p>\n
OPTUM IMPROVEMENT <\/p>\n
On a yearly basis, \u200csecond-quarter operating income for Optum increased 29% to $4 billion, driven by improved \u200boperations at technology segment Optum Insight and better access to care in \u200bits clinical unit. <\/p>\n
Optum dragged on earnings in the first quarter \u200bas its operating income fell 15% year-over-year to $3.3 billion. <\/p>\n
AI tools the company has introduced this year have \u200creduced administrative burden and increased the amount of time \u200bOptum Health clinicians can spend \u200btreating patients, DeVeydt said. <\/p>\n
“We said, with Optum Health, this would be a multi-year journey to return to historical growth levels and margins,” said DeVeydt, who expects revenue growth to fully return in 2028. “I would say we are ahead of \u200bschedule in year one.” <\/p>\n
UnitedHealth this year pulled back \u200con Medicare Advantage offerings for older adults and Optum exited less favorable contracts for coordinated care plans. <\/p>\n
The company \u200blast year said Optum faced regulatory and cost challenges, representing an $11 billion blow to the unit over three \u200byears. <\/p>\n
(Reporting by Amina Niasse; Editing by Caroline Humer and Christopher Cushing) <\/p>\n","protected":false},"excerpt":{"rendered":"By Amina Niasse NEW YORK, July 16 (Reuters) – UnitedHealth Group raised on Thursday its 2026 profit forecast…\n","protected":false},"author":2,"featured_media":808658,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[57008,49,48,283858,84,8542,392,238107,20391,23688,3858,26580,3857,28535],"class_list":["post-808657","post","type-post","status-publish","format-standard","has-post-thumbnail","category-healthcare","tag-adjusted-basis","tag-ca","tag-canada","tag-cost-controls","tag-health","tag-health-insurance","tag-healthcare","tag-lseg","tag-medical-costs","tag-operating-income","tag-optum","tag-stephen-hemsley","tag-unitedhealth-group","tag-wayne-deveydt"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/808657","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=808657"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/808657\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/808658"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=808657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=808657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=808657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}