UnitedHealth (NYSE:UNH) shares rose in the premarket on Tuesday after the managed care giant beat Wall Street expectations with its Q3 results and raised its full-year earnings outlook.
Shares of the Eden Prairie, Minnesota-based health insurer rose ~4.4%, while Humana (HUM), its biggest rival in the Medicare Advantage market, gained ~1%. UNH’s other peers in the managed care space include CVS Health (CVS) +1.8%, Alignment Healthcare (ALHC), Centene (CNC) +1.9%, Molina Health (MOH) +1.6%, Elevance Health (ELV) +2.2%, Oscar Health (OSCR) +1.4%.
UnitedHealth (NYSE:UNH) now expects full-year 2025 adjusted earnings of at least $16.25 per share, up from its prior guidance of $16.00, and slightly above the $16.22 consensus estimate. “We remain focused on strengthening performance and positioning for durable and accelerating growth in 2026 and beyond, and our results this quarter reflect solid execution toward that goal,” said Stephen Hemsley, chief executive officer of UnitedHealth Group.
For Q3, UnitedHealth (NYSE:UNH) generated adjusted EPS of $2.92 on revenue of $113.2B that grew +12.3% Y/Y. Both metrics comfortably beat analysts estimates.
UnitedHealthcare revenues grew 16% year-over-year to $87.1 billion, driven by growth in Medicare & Retirement and Community & State. Optum revenues grew 8% year-over-year to $69.2 billion, driven by growth in Optum Rx. Analysts were projecting a revenue of $86.72 billion in the UnitedHealthcare segment and $67.52 billion in the Optum segment.
Meanwhile, the company’s consolidated medical care ratio rose 470 basis points from the prior year period to 89.4%, below the 90.7% projected by analysts. The increase was mainly due to higher cost trends, along with the impact of Medicare funding cuts and Part D changes under the Inflation Reduction Act.
Cash flows from operations were $5.9 billion in the third quarter, or 2.3x net income.