UnitedHealth Group signage on the floor of the New York Stock Exchange (NYSE) on Wednesday, December 31, 2025 in New York, USA.
Michael Nagle | Bloomberg | Getty Images
united health group The company on Tuesday issued a soft earnings outlook despite a modest increase in fourth-quarter profit as the parent company of the nation’s largest private insurance company tries to rebuild amid higher-than-expected medical costs.
Below is a comparison of the company’s fourth-quarter report with Wall Street’s expectations, based on a survey of analysts by LSEG.
Earnings per share: $2.11 adjusted vs. $2.10 expected Revenue: $113.2 billion vs. $113.82 billion expected
The results were announced two days after UnitedHealth CEO Stephen Hemsley and other CEOs of Minnesota’s largest companies joined together to sign an open letter calling for an “immediate de-escalation of tensions” in the state after a federal immigration officer shot and killed 37-year-old American citizen Alex Preti, an ICU nurse.
The company’s fourth-quarter net income was $10 million, or 1 cent per share, compared with net income of $5.54 billion, or $5.98 per share, in the year-ago period. Excluding items such as divestitures, restructurings and costs related to the massive cyberattack on its Change Healthcare business, UnitedHealth earned $2.11 per share.
Sales increased from $100.81 billion in the same period last year.
UnitedHealth is looking to new management to execute its turnaround plan. The strategy includes reducing membership numbers, increasing prices, cutting benefits and increasing transparency to restore profitability along with the company’s reputation after a series of hurdles over the past two years.
UnitedHealth expects 2026 revenue to exceed $439 billion, a 2% year-over-year decline reflecting “rightsizing across the enterprise,” the company said in a release. That’s well below the $454.6 billion in sales this year that analysts had expected.
“This is the first time in 10 years that UnitedHealth Group’s sales will decline,” Chief Financial Officer Wayne DeVate said in an interview, referring to the sales outlook.
He cited three factors driving the expected decline, including the company’s sale in the fourth quarter and other divestitures planned for later this year, including operations in the United Kingdom and South America. He also noted that by 2026, membership across the U.S. will decline by more than 3 million people “pretty significantly.”
“In the fourth quarter, I would say we righted the ship in the sense that we obviously got rid of some of our South American and European business,” he said. “We are focused on our domestic U.S. operations and have essentially strengthened our balance sheet and repositioned the company for the historic growth that our investors have seen.”
The third factor is that 2026 is the final year of transition to Medicare’s new coding system (known as V28). V28 reduced payments to insurance companies by changing the way patient diagnoses are weighted, DeBate said. This would be a $6 billion hit to revenue, of which $2 billion would affect the company’s insurance company, UnitedHealthcare, and the rest would affect Optum’s healthcare division, he noted.
Shares of UnitedHealth and other health insurance companies fell sharply on Monday after the Centers for Medicare and Medicaid Services proposed near-uniform payment rates for Medicare Advantage insurers. Medicare Advantage is a private insurance program that currently covers more than half of Medicare beneficiaries.
Closely monitored government payment rates determine how much monthly premiums insurance companies can charge and how much benefits they offer, ultimately helping shape their profits.
Medical costs for Medicare Advantage patients have soared over the past two years as more seniors return to hospitals for surgeries such as joint and hip replacements that were delayed during the pandemic. DeVate said medical costs in the fourth quarter were “still rising and high, but not as high as expected.”
In 2026, UnitedHealth projects the insurance sector’s medical benefit ratio (a measure of total medical expenses paid relative to premiums collected) to be 88.8% plus or minus 50 basis points. This would be an improvement from the 89.1% ratio reported in 2025. A low ratio usually indicates that the company is collecting more premiums than it is paying out in benefits and is therefore more profitable.
