UnitedHealth Group (NYSE:UNH) shares jumped more than 8% on Tuesday after the health insurance giant delivered a strong first-quarter earnings beat and raised its full-year profit outlook — signaling that a prolonged period of elevated medical costs may finally be turning the corner.
- UNH stock is climbing. See the chart and price action here.
The Numbers
UnitedHealth reported adjusted earnings per share of $7.23 for Q1, handily topping the Wall Street consensus of $6.58.
Revenue came in at $111.7 billion, up 2% year over year and ahead of the $109.58 billion expected, according to estimates from Benzinga Pro.
The company’s medical care ratio — a key measure of what insurers pay out in claims relative to premiums — improved to 83.9%, down 90 basis points from 84.8% a year ago, reflecting tighter cost management and favorable reserve development.
Medical Costs Easing — Cautiously
The improvement in medical costs was a central theme of the earnings call.
UnitedHealthcare President Tim Noel noted that care utilization trends are running “consistent with expectations,” with “modest favorability” in government programs including Medicare Advantage.
UNH had priced its 2026 MA business assuming roughly 10% medical trend — a steep assumption — and …