UnitedHealth Group posted second-quarter earnings that exceeded analyst estimates and raised its full-year profit outlook on Thursday, as the largest private insurer in the U.S. implements cost management strategies and deploys artificial intelligence to streamline operations. The company reported adjusted earnings per share of $6.38 against expectations of $4.90 and revenue of $112.03 billion versus the $110.85 billion forecast. CFO Wayne DeVeydt stated that medical costs in the quarter remained "elevated over historical levels," an issue affecting the broader insurance industry for more than two years, but emphasized the results reflect efforts to reduce already-elevated cost baselines rather than trend reversal.
UnitedHealth Raises Full-Year Earnings Outlook to $19.50-$20 Per Share
The company increased its 2026 adjusted earnings guidance to $19.50 to $20 per share, up from a previous outlook of more than $18.25 per share. UnitedHealth maintained its full-year revenue guidance of greater than $439 billion, though DeVeydt said in an interview he expects the company to "do better than that" given the second-quarter beat. The company posted second-quarter net income of $5.48 billion, or $6.04 per share, compared with $3.41 billion, or $3.74 per share, in the same period a year ago. Excluding items like business divestitures, restructuring and the expected reduction of reserves for unprofitable contracts, UnitedHealth earned $6.38 per share. Revenue climbed to $112.03 billion from $111.62 billion in the prior-year quarter.
Company Deploys $1.5 Billion AI Investment to Improve Operational Efficiency
UnitedHealth is pouring $1.5 billion into artificial intelligence to streamline operations as part of its turnaround plan. DeVeydt said the company is using AI to improve both efficiency and patient care, with tools helping speed up processes like prior authorizations and improve payment accuracy by detecting potential fraud, waste and abuse. AI tools are not determining whether care is approved or denied, he stated. "I would say the turnaround, and I would emphasize that on our culture, it's really happening ... that turnaround is translating to strong, strong earnings," DeVeydt told reporters. "So it shows that when we can do things the way we think they should be done, that we can be both a solution and be profitable." He emphasized the turnaround is a "multi-year journey."
Membership Declines 525,000 as Rising Healthcare Costs Drive Affordability Pressures
UnitedHealthcare served 48.5 million people in the second quarter, down 525,000 from the previous quarter. DeVeydt attributed membership declines largely to affordability pressures driven by higher healthcare costs. The company forecasts a loss of roughly 500,000 exchange members and 1.1 million Medicare Advantage members in 2026. UnitedHealth said rising healthcare costs are forcing insurers to raise premiums and adjust benefits, which is contributing to membership losses in both ACA exchange plans and privately run Medicare Advantage plans. The company said revenue has remained stable because higher pricing is offsetting the decline in enrollment, though DeVeydt said that dynamic "is not a good thing for the system long term."
Medical Benefit Ratio Improves to 86.7% in Second Quarter
UnitedHealth's medical benefit ratio came in at 86.7% for the second quarter, an improvement from the 89.4% reported in the year-earlier period. A lower ratio typically indicates that the company collected more in premiums than it paid out in benefits, resulting in higher profitability. Analysts were expecting a ratio of 88.5% for the quarter, according to StreetAccount. The company's insurer, UnitedHealthcare, and its Optum health-care unit both topped analysts' sales estimates for the quarter.
DOJ Investigation into Medicare Billing Practices Continues
The results come about a year after UnitedHealth revealed it is facing Department of Justice investigations over its Medicare billing practices. DeVeydt said the company has no updates but continues to be "supportive" of the probe.
FAQ
What did UnitedHealth report for second-quarter earnings?
UnitedHealth reported second-quarter adjusted earnings per share of $6.38, exceeding analyst expectations of $4.90, and revenue of $112.03 billion versus the $110.85 billion forecast. The company posted net income of $5.48 billion, or $6.04 per share, compared with $3.41 billion, or $3.74 per share, in the same period a year ago.
Why did UnitedHealth raise its full-year earnings outlook?
UnitedHealth raised its 2026 adjusted earnings guidance to $19.50 to $20 per share from more than $18.25 per share due to better cost management and a $1.5 billion investment in artificial intelligence to streamline operations. CFO Wayne DeVeydt stated the results reflect efforts to reduce elevated cost baselines, though medical costs remained "elevated over historical levels" in the quarter.
How is UnitedHealth using artificial intelligence in its operations?
UnitedHealth is deploying $1.5 billion into artificial intelligence to speed up processes like prior authorizations and improve payment accuracy by detecting potential fraud, waste and abuse. DeVeydt stated AI tools are not determining whether care is approved or denied, but are improving both efficiency and patient care as part of the company's multi-year turnaround plan.
