UnitedHealth Group (UNH) released a strong second-quarter earnings report on Thursday, with lower medical costs driving a significant boost in profitability. The company also raised its full-year earnings guidance, sending shares up more than 8% in early trading following the announcement.
So far in 2026, UnitedHealth Group stock has gained 37%. However, the shares remain more than 25% below the all-time high set in 2024, and the market believes the company is building momentum to return to its previous peak.
Second-quarter revenue came in at $112 billion, a modest increase from $111.6 billion in the same period last year. Operating profit, however, jumped sharply to $8 billion, up from $5.2 billion a year earlier. Earnings per share reached $6.04, compared with $3.74 in the prior-year quarter.
In addition, the company’s medical care ratio—the percentage of premium revenue used to pay medical claims—came in at 86.7%, down from 89.4% in the year-ago period. Management attributed the improvement to pricing discipline, membership mix optimization, and medical cost management initiatives.
Chief Executive Officer Stephen Hemsley said: “Our results and outlook reflect the continued progress we are making in simplifying our operations, improving affordability and the care experience for patients and care providers, and applying modern technology to create tangible improvements for people.”
UnitedHealth Group raised its full-year operating profit guidance to $25.45 billion, up from a prior forecast of $24 billion. The company now expects adjusted earnings per share in the range of $19.50 to $20.00, compared with previous guidance of $17.75 per share. The full-year medical care ratio is now projected at 88.1%, down from the earlier estimate of 88.8%.
Optum, UnitedHealth Group’s health services and technology segment, also showed improved performance this quarter. Revenue declined to $65.7 billion in the most recent quarter from $67.2 billion in the same period last year, with the number of patients served falling by 700,000. However, operating profit rose to $4.0 billion from $3.1 billion a year earlier.
Management attributed the improvement to operational optimization and medical cost management. Optum is also rolling out a suite of AI-enhanced products, including autonomous coding and digital prior-authorization tools, which are expected to improve the company’s future revenue.
Hemsley said: “We are committed to making the health system work better for all stakeholders by simplifying processes, providing clearer, more consistent, and faster experiences, and redesigning and modernizing the entire experience. AI technology is helping us accelerate our pace.”
UnitedHealth Group is making a major push into artificial intelligence to stabilize its business. The company’s investment in AI this year totals approximately $1.5 billion, and management told investors during the first-quarter 2026 earnings call that it expects a conservative 2-to-1 return on that investment over the coming years, with multiple tools achieving cost recovery within 12 to 18 months.
The allocation of investment capital has been carefully planned. Roughly one-third is directed to software products and platforms, driving its Optum Insight division toward an “AI-first” model; the remaining two-thirds is dispersed across everyday processes such as claims processing and prior authorization. The company said it has identified more than 1,000 potential AI use cases.
Some results are already emerging. At Optum Rx, the AI prior-authorization tool has reduced prescription approval times from over eight hours to under 30 seconds, while denial rates due to missing information have fallen 68% and appeal volumes have dropped 88%. Call center call volume has decreased by 25% as members shift to AI self-service. Its OptumReal claims platform has processed approximately 500 million claims so far this year and is expected to handle 2.5 billion transactions by year-end.
