UnitedHealth Group, the giant conglomerate, showed some signs of recovery from last year’s steep decline in profits when the company reported first-quarter earnings on Tuesday that were higher than Wall Street’s expectations.
The company’s earnings were relatively flat year-over-year, reflecting UnitedHealth Group’s difficulties in navigating rising medical costs, government scrutiny of its billing practices and the sustained general public distrust of health insurers. It is the first of the major for-profit insurers to report results for the first quarter of 2026, signaling little let up of industrywide challenges.
The company reported a net income of $6.48 billion, or $6.90 per share, from $6.47 billion, or $6.85 a share, for the same period last year. Revenue for the first quarter this year was $111.7 billion, up from $109.6 billion in the prior year.
“Our first-quarter results reflect improving fundamentals and a strengthening of operations across our businesses,” said Wayne DeVeydt, the company’s chief financial officer. He pointed to improvements in UnitedHealth’s medical cost ratio, a measure of how much of the company’s premiums are consumed by medical expenses. UnitedHealth said it was able to raise prices and contain costs to lower the ratio.
UnitedHealth raised its profit outlook for 2026 to adjusted earnings per share of greater than $18.25 a share.
Wall Street analysts viewed the report as signs that UnitedHealth was making clear progress. The company’s overall profitability is improving, Brian Mulberry, chief market strategist at Zacks Investment Management, said in a statement, adding that its restructuring and investments in artificial intelligence could result in even better results.
“This is allowing for a new floor in earnings to feel stronger, adding more investor confidence going forward,” he said.
The stock gained nearly 9 percent, to trade around $352.86 by midmorning Tuesday. The shares reached a high in November 2024, when the stock was over $600 a share.
Once one of the nation’s most highly valued and respected companies, UnitedHealth posted sharply lower results last spring that led the company’s stock price to plummet. Its share price lost nearly half its value in a matter of months.
The company abruptly replaced its chief executive, bringing back Stephen Hemsley, a former C.E.O. who vowed to go through the company’s operations and return the business to double-digit growth.
UnitedHealth had long prospered from its ability to amass an unparalleled range of health care businesses, from the nation’s largest health insurer to giant data operations to doctors’ practices to pharmacy benefit services.
The company owns UnitedHealthcare, the insurer that pays for the care of 49 million people, and is one of the largest sellers of plans for Medicare Advantage, the private plans under Medicare that now cover health care for about half of the beneficiaries age 65 or older or who have disabilities. It operates Optum, which delivers care through a vast network of about 90,000 affiliated doctors. Its giant pharmacy benefit manager, Optum Rx, handles about 60 million patients’ prescriptions.
The conglomerate also owns Change Healthcare, the clearinghouse that processes more than a third of all U.S. claims among pharmacies, doctors, hospitals and the insurers. It was also the target of a devastating cyberattack in 2024.
That vulnerability and United’s outsized influence on so many health sectors led some lawmakers to call for the company to be broken up.
Since last spring, United’s sprawling expansion has largely ended, with the company now describing how it is reducing costs — exiting businesses, including some in Britain and elsewhere outside the United States; overhauling its executive ranks; and dropping plans in unprofitable markets.
In announcing the company’s results for the first three months of 2026, UnitedHealth’s executives pointed to those efforts. “We are continuing to help simplify and modernize health care for the people we serve, bringing greater value, affordability, transparency and connectivity,” Mr. Hemsley said in a statement.
UnitedHealth also emphasized its investments in A.I., saying it planned to spend about $1.5 billion this year. “We are leaning into this,” Mr. Hemsley told analysts on a conference call Tuesday morning.
The company said it would use the technology to streamline approvals for medical care and to improve the experience of its customers. Last month, UnitedHealth introduced Avery, a bot aimed at helping people better navigate their health benefits.
One of the company’s biggest setbacks has been the decline in what had been an extremely lucrative Medicare Advantage business. Federal officials have cracked down on the plans’ ability to overcharge the government for their services by exaggerating the prevalence of some diagnoses. Some of those practices are still under federal scrutiny.
That market has also become less profitable for UnitedHealth as the insured become sicker and medical costs rise overall. The company said it had shed nearly one million customers in the Medicare Advantage market.
And it announced an estimated $6 billion drop in this year’s revenue, based on the U.S. government’s decision to change how it paid for Medicare Advantage services, including those provided by UnitedHealth and Optum. But the company and other insurers stand to benefit from the government’s recent decision to increase overall payments next year.
Along with the nation’s other major insurers, United has also become the target of an outpouring of rage and frustration among the public and lawmakers, who cite the industry’s practice of prior authorization for some services leading to delays and denial of necessary care. The company said it was working on making the approval easier and simpler, with plans to reduce the number of medical authorizations at least 30 percent by the end of the year.
Ahead of the midterm elections, the public remains concerned about the high cost of medical care, including what they pay for health insurance and their overall out-of-pocket costs, according to public opinion polls. In late 2024, the company’s top health insurance executive, Brian Thompson, was gunned down in Midtown Manhattan, a killing that unleashed a visceral public animus toward insurers.
Republican and Democratic lawmakers have often pointed the finger at the companies for contributing to high health care costs. Health care has recently been at the top of people’s affordability concerns.
Reed Abelson covers the business of health care, focusing on how financial incentives are affecting the delivery of care, from the costs to consumers to the profits to providers.
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