UnitedHealth Group (UNH) Q4 2025 earnings

UnitedHealth Group On Tuesday, it reported a modest beat in fourth-quarter earnings, but issued weak revenue guidance, as the parent of the nation’s largest private insurer works to turn itself around amid higher-than-expected medical costs.

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

• EPS: $2.11 was revised from $2.10 expected
• profit: $113.2 billion compared to $113.82 billion expected

The findings come two days after UnitedHealth CEO Stephen Hemsley and other CEOs of Minnesota’s largest companies came together to sign an open letter calling for the “immediate de-escalation of tensions” in the state after federal immigration agents shot US citizen Alex Peretti, a 37-year-old ICU nurse.

The company reported fourth-quarter net income of $10 million, or 1 cent per share, compared to $5.54 billion, or $5.98 per share, in the same period last year. Excluding items such as business divestitures, restructurings and costs related to the massive cyberattack on its Change Healthcare business unit, UnitedHealth had earnings of $2.11 per share.

Revenue rose from $100.81 billion in the previous quarter.

UnitedHealth is relying on a new leadership team to execute its transformation plan. The strategy involves scaling back memberships, raising 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.

The company said in a statement that it expects 2026 revenues to exceed $439 billion, a 2% year-over-year decline that reflects “appropriate sizing across the enterprise.” This is well below the $454.6 billion in sales that analysts expected for this year.

“It’s the first time in a decade that UnitedHealth Group has seen a decline in revenue,” Chief Financial Officer Wayne Davidt said in an interview, referring to the sales guidance.

He pointed to three factors driving the expected decline, including the company’s divestitures in the fourth quarter and other factors scheduled for later this year, such as its operations in the United Kingdom and South America. He also noted a “fairly significant” overall decline in U.S. membership of more than 3 million in 2026.

“I would say that in the fourth quarter, we righted the ship in the sense that we eliminated through friction, obviously, the South American and European operations,” he said. “We are focused on domestic U.S. businesses and have fundamentally strengthened the balance sheet and repositioned the company for the historic growth that investors have seen.”

A third factor, Davidt said, is that 2026 is the final year for the transition to Medicare’s new coding system — known as V28 — which reduced payments to insurers by changing how patients’ diagnoses were weighted. He noted that this would translate into revenues of up to $6 billion, of which $2 billion would affect the company’s insurance company, UnitedHealthcare, while the rest would affect the Optum healthcare unit.

On Monday, shares of UnitedHealth and other health insurers fell after the Centers for Medicare and Medicaid Services proposed nearly flat payment rates for insurers in Medicare Advantage, the privately run insurance program that now covers more than half of all Medicare beneficiaries.

The closely watched government payout rate determines how much insurers can charge for the monthly premiums and plan benefits they offer — and ultimately helps shape their profits.

Medical costs for Medicare Advantage patients have risen over the past two years as more seniors return to hospitals for procedures they delayed during the pandemic, such as joint and hip replacements. In the fourth quarter, those medical costs were “still high and rising but not growing beyond expectations,” Davidt said.

For 2026, UnitedHealth expects its insurance segment medical benefit ratio — a measure of total medical expenses paid compared to premiums collected — to reach 88.8%, plus or minus 50 basis points. This would be an improvement from the 89.1% recorded for 2025. A lower ratio usually indicates that the company collected more in insurance premiums than it paid in interest, which led to increased profitability.