UnitedHealth Group Inc (NYSE:UNH, XETRA:UNH) shares rose more than 10% on Tuesday after the company reported first quarter results that exceeded Wall Street expectations and raised its full-year profit forecast, citing improved management of medical costs and ongoing operational changes.
The private health insurer said it now expects 2026 adjusted earnings of more than $18.25 per share, up from a prior outlook of more than $17.75 per share.
The company reaffirmed its full-year revenue guidance of greater than $439 billion, which it previously described as reflecting “right-sizing across the enterprise.”
For the first quarter, UnitedHealth reported adjusted earnings per share of $7.23, ahead of the $6.57 expected by analysts.
Revenue came in at $111.72 billion, also above the $109.57 billion consensus estimate.
On a reported basis, net income for the quarter was $6.28 billion, compared with $6.29 billion in the same period a year earlier. Reported earnings per share were $6.90 versus $6.85 in the prior-year quarter. Revenue rose slightly from $109.58 billion a year ago.
The better-than-expected results were driven by performance across both of the company’s core segments, UnitedHealthcare and Optum.
The company also pointed to progress in managing medical costs, a persistent challenge across the health insurance industry over the past two years. UnitedHealth reported a first-quarter medical care ratio of 83.9%, reflecting a 90-basis-point improvement from the year-ago period.
Operating results also reflected increased investment in technology and operations. The company said its operating cost ratio rose to 13.8% from 12.4% a year earlier, driven in part by spending on artificial intelligence, modernization efforts, and process improvements.
Segment performance showed continued scale across the business, with UnitedHealthcare serving 49.1 million consumers and Optum supporting more than 122 million. Optum generated $63.7 billion in revenue for the quarter, while UnitedHealthcare expanded operating margins to 6.6% from 6.2% a year earlier.
“We are continuing to help simplify and modernize health care for the people and care providers we serve, bringing greater value, affordability, transparency and connectivity,” UnitedHealth CEO Stephen Hemsley said.