UnitedHealth Group on Thursday posted second-quarter earnings that blew past estimates and raised its full-year profit outlook, as the company better manages high medical costs and uses AI to help streamline operations. 

The largest private insurer in the U.S. said it expects 2026 adjusted earnings of $19.50 to $20 per share, up from a previous outlook of more than $18.25 per share. UnitedHealth is maintaining its full-year revenue guidance of greater than $439 billion. But CFO Wayne DeVeydt said in an interview that he expects the company to “do better than that” given the second-quarter beat. 

Still, he said medical costs in the quarter remained “elevated over historical levels” – an issue that has dogged the broader insurance industry for more than two years.

“These results are not a reflection of trend bending or coming under control, but rather our efforts to start pushing down what is already an elevated number,” DeVeydt said. 

Here’s what the company reported for the second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: $6.38 adjusted vs. $4.90 expected
• Revenue: $112.03 billion vs. $110.85 billion expected

The company’s stock jumped more than 7% in morning trading.

UnitedHealth’s turnaround plan is gaining momentum following restructuring and an executive shuffle designed to counter challenges in the industry. The healthcare giant is working to stabilize margins by shrinking membership, exiting unprofitable contracts and pouring $1.5 billion into artificial intelligence to streamline operations. 

DeVeydt said the company is using AI to improve both efficiency and patient care. For example, AI is helping speed up processes like prior authorizations and improve payment accuracy by detecting potential fraud, waste and abuse. That can help lower costs while improving patient care. AI tools are not determining whether care is approved or denied, he said. 

“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.”

But he emphasized that the turnaround is a “multiyear journey.”

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. The company’s insurer, UnitedHealthcare, and its Optum healthcare unit both topped analysts’ sales estimates for the quarter, according to StreetAccount. 

UnitedHealth said rising healthcare costs are forcing insurers to raise premiums and adjust benefits, which is contributing to membership losses in both Affordable Care Act exchange plans and privately run Medicare Advantage plans. The company said revenue has remained stable because higher pricing is offsetting the decline in enrollment.

But DeVeydt said that dynamic “is not a good thing for the system long term.”

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, forecasting a loss of roughly 500,000 ACA exchange members and 1.1 million Medicare Advantage members in 2026.

Insurers, particularly those that run Medicare Advantage plans, have been pinched by an influx of people seeking care they delayed post-pandemic and high-cost specialty drugs like GLP-1s, among other factors. 

But UnitedHealth’s medical benefit ratio — a measure of total medical expenses paid relative to premiums collected — came in at 86.7% for the second quarter. That’s 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 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.

Britain’s biggest pub landlord is under formal investigation over suspicions it mistreated the thousands of small business owners who run its tied pubs, an inquiry that could end in a fine of up to £16 million.

The Pubs Code Adjudicator (PCA) has launched a statutory investigation into Stonegate, which has more than 4,500 sites across the UK, only the second such inquiry since the regulator was created a decade ago.

Fiona Dickie, the adjudicator, said she has reasonable grounds to suspect the company failed to comply with its duties “to provide accurate and transparent information to both its existing and prospective tied pub tenants” in a number of respects. The investigation covers a five-year period from July 2021 to July this year.

For the tenants at the sharp end, the stakes could hardly be higher. Tied publicans are small business owners in their own right, and the inquiry will examine concerns that some feel they were misled into taking on pubs that may never have been viable.

Dickie is looking at four core issues: the condition of pubs taken on by tenants, the accuracy of financial projections given to prospective tenants, whether Stonegate’s business development managers treated tenants within the rules, and whether the group reported actual or alleged breaches of the code to the regulator as required.

Her annual research has shown Stonegate’s tenants have been the least satisfied of any regulated pub group for at least three years running. Fewer than two in five report being satisfied with their relationship with the company, against an industry average of two in three.

“In order to launch a statutory investigation, I have to have evidence of the basis on which I can suspect a breach of the code,” Dickie told The Times. “I can’t launch an investigation based on hearsay or a hunch. I’m launching this investigation now because I do have such evidence on which I suspect breaches of the code.”

If found in breach, Stonegate faces a fine of up to 1 per cent of its total UK turnover, which stood at £1.6 billion in its last financial year.

The timing is awkward for a company already under strain. Stonegate, controlled by the private equity firm TDR Capital, which also owns Asda, carries a debt burden of more than £3 billion and sank to a pre-tax loss of £174 million in the year to September 2025. It is also preparing a £1 billion sell-off of more than 1,000 venues as it looks to steady its finances.

The investigation could complicate chief executive David McDowall’s plan to convert more managed pubs into tenanted and leased sites, a strategy central to the turnaround of a business that has long struggled under the weight of its borrowings. Three quarters of its pubs are now leased and tenanted.

The Pubs Code came into force in 2016 to give tied tenants a fairer deal, requiring that publicans should be no worse off than if they were free of the tie. It arrives at a bruising moment for the trade, with pubs closing at a rate of nearly two a day as costs climb.

Chris Wright, of the Pubs Advisory Service, welcomed the inquiry but questioned why it had taken so long. “These issues are nothing new, and they predate 2021, and have been raised with the regulator numerous times since 2016. Sadly, for many people the damage has already been done,” he said, adding that “lots of people have lost their livelihoods”.

A Stonegate spokesman said: “We acknowledge the launch of a statutory investigation. Stonegate is fully committed to complying with the code and ensuring all publicans are treated fairly. Stonegate has communicated at length with the adjudicator over the two specific cases that form the basis of this investigation, and we will co-operate fully throughout.”

Dickie said she wants to hear from current and former Stonegate tenants, as well as staff, former staff and advisers who may have evidence relevant to the investigation.

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

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