UnitedHealthcare’s sign is displayed at its office building in Minnetonka, Minnesota, USA on December 11, 2025.

Tim Evans | Reuters

UnitedHealth Group on Tuesday reported first-quarter profit that beat estimates and raised its 2026 profit outlook as the company can better manage high medical costs and streamline its operations.

The nation’s largest private insurer said it expects adjusted profit of more than $18.25 per share in 2026, up from a previous forecast of more than $17.75 per share. UnitedHealth is sticking to its full-year revenue forecast of more than $439 billion, which the company said in January reflects “right-sizing across the business.”

Here’s what the company reported for the first quarter compared to Wall Street’s expectations, based on an analyst survey from LSEG:

• Earnings per share: $7.23 adjusted vs. $6.57 expected
• Revenue: $111.72 billion versus expected $109.57 billion

UnitedHealth is relying on a new leadership team to implement a turnaround plan. The strategy includes reducing membership, selling the UK business of its Optum healthcare unit, investing heavily in artificial intelligence, optimizing access to healthcare and increasing transparency to restore profitability – and the company’s reputation – after a series of hurdles over the past two years.

The company reported first-quarter net income of $6.28 billion, or $6.90 per share, compared with $6.29 billion, or $6.85 per share, in the same period last year. Excluding items such as divestitures, restructuring and the expected reduction in reserves for unprofitable contracts, UnitedHealth earned $7.23 per share.

Sales rose to $111.72 billion from $109.58 billion in the same quarter last year. According to StreetAccount, the company’s insurer, UnitedHealthcare, and Optum both beat analysts’ revenue estimates for the quarter.

In particular, UnitedHealth appears to have a better handle on higher medical costs, an issue that has plagued the entire insurance industry for more than two years. Insurers, particularly those that manage private Medicare plans, have been burdened by the influx of care seekers, the post-pandemic delay and expensive specialty drugs like GLP-1, among other factors.

More CNBC Health coverage

UnitedHealth’s medical claims ratio – a measure of total medical costs paid relative to premiums collected – was 83.9% in the first quarter. This is an improvement over the 84.8% reported in the same period last year. A lower ratio typically indicates that the company collected more in premiums than it paid out in benefits, leading to higher profitability.

According to StreetAccount, analysts expected a rate of 85.5% for the quarter.

In a press release, UnitedHealth said its first-quarter ratio reflected strong medical expense management and the release of previously deferred funds for unprofitable Optum contracts. However, this improvement was partially offset by “continued elevated” medical costs, the company noted.

“We continue to help simplify and modernize health care for the people and providers we serve, providing greater value, affordability, transparency and connectivity,” UnitedHealth CEO Stephen Hemsley said in the release.

The results come just weeks after the Trump administration finalized a payment rate increase for Medicare Advantage plans through 2027 that was far larger than initially proposed, boosting UnitedHealth and other health insurer stocks.

Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.