UnitedHealth Reclaims Its Mojo: Earnings Beat, Cost Control, and Raised Guidance Fuel Six-Month Highs

UnitedHealth Group just put together the kind of quarter it needed to keep the recovery narrative alive. After spending most of the year digging out of a credibility hole — leadership shakeup, guidance resets, sector-wide anxiety over Medicare Advantage cost trends — the company delivered cleaner execution in Q3, raised full-year guidance, and showed improvement in its key cost metric. Investors are rewarding it. Shares are up about 4% pre-market, they’ve finally broken through the $365 resistance band, and the stock is now trading at six-month highs with a shot at testing the 200-day moving average up near $389. That’s notable because UNH hasn’t traded above its 200-day since April 16, when Q1 blew up the story. In short: UnitedHealth has gone from “damaged” to “credible again,” and the tape is confirming it.

Let’s get into the actual print.

UnitedHealth reported Q3 adjusted EPS of $2.92, ahead of consensus at $2.84–$2.80, depending on the source, and well above the $2.75 implied in some of the more conservative sell-side models. GAAP EPS was $2.59. Revenue was $113.2 billion, a touch better than the $113.16 billion FactSet number and essentially in line with expectations, up from $100.8 billion a year ago. Operating cash flow was strong at $5.9 billion, or 2.3x net income, which is the kind of balance sheet reassurance investors wanted to see after a volatile first half. Earnings from operations were $4.3 billion, with a consolidated net margin of 2.1%.

One of the most-watched numbers for any managed care name is medical cost. Here, UNH bought itself some breathing room. The company posted a medical care ratio (also called medical-loss ratio, or MLR) of 89.9%. The Street was looking for something closer to 90.7%. Lower is better — it means they spent a smaller share of premium revenue on claims than feared. Management emphasized that utilization landed “in line with expectations” that were laid out in Q2 after the spring reset. That’s critical because investors have been worried about elevated outpatient and seniors’ services usage in Medicare Advantage. The message is: costs are not blowing out worse than what they already told you.

Guidance came in better too. UnitedHealth raised its full-year adjusted EPS outlook to at least $16.25 from at least $16.00 previously. That’s now above the $16.22 consensus and signals confidence that the back half of the year isn’t going to deteriorate meaningfully. On a GAAP basis, they now see at least $14.90 per share. Management framed this as execution plus visibility into 2026, not just a one-quarter cost win. The tone from CEO Stephen Hemsley was about “durable and accelerating growth in 2026 and beyond,” which is intentional — they’re trying to pivot the story from “patching a leak” to “reset base, re-accelerate next year.”

Segment detail shows why the stock is acting well: the core insurance engine is doing the heavy lifting, and the pharmacy benefit business is stable enough to keep the bear case contained.

UnitedHealthcare, the insurance arm, posted $87.1 billion in revenue, up 16% year-over-year. That growth was driven by Medicare & Retirement and Community & State, with total U.S. membership at 50.1 million, up 795,000 year-over-year. Medicare Advantage membership rose by 625,000 over the past year, and Medicaid-related Community & State revenue climbed 18% as the company leaned into serving higher-acuity populations and benefited from rate adjustments. That’s exactly where investors wanted strength: senior and government books. It tells you that, despite all the noise about Medicare Advantage funding cuts and Medicaid redeterminations, UNH is still adding covered lives and still getting paid.

Margins in UnitedHealthcare, however, show why this is not “mission accomplished.” Segment operating margin was 2.1%, down from 5.6% a year ago, and operating earnings were $1.8 billion versus $4.2 billion last year. Management cited elevated medical cost trend, Biden-era Medicare funding reductions, and Part D changes under the Inflation Reduction Act as the main drags. Translation: revenue is scaling, but reimbursement pressure and higher senior-care intensity are still real. The bull read is that this is now fully disclosed and embedded in guidance; the bear read is that it’s the new normal.

Optum, the health services platform, is more mixed.

Optum Health, which delivers care and manages risk-based arrangements, reported $25.9 billion in revenue, basically flat year-over-year. Operating earnings dropped sharply to $255 million from $2.2 billion last year, with operating margin sliding to 1% from 8.3%. This is where the cost story shows up again: higher utilization and lower reimbursement in senior populations hit profitability hard. This is also where skeptics have argued UNH was over-earning before.

Optum Insight, the data/analytics/administrative services unit, posted $4.9 billion in revenue, flat year-over-year. Earnings from operations were $706 million, down from $791 million, as the company continues to invest for future growth. Margin was 14.4% vs. 16.0% last year. The backlog here is still substantial — $32.1 billion in contract revenue — which supports forward revenue visibility even if margins dip near term.

Optum Rx, the pharmacy benefits manager, put up $39.7 billion in revenue, +16% year-over-year. Operating earnings were $1.5 billion, flat with last year, but margins compressed to 3.9% from 4.5%. The drag is mix: higher-cost drugs drive revenue growth but dilute percentage margin. That said, script volumes rose to 414 million from 407 million, and that stability is important. If Optum Rx holds, it acts as a ballast while Optum Health works through reimbursement pressure.

So how is Wall Street reading this? The stock’s reaction answers that. UNH is up ~4% pre-market, peers like Elevance and Humana are catching a sympathy bid, and technically, the setup just got interesting. UnitedHealth has cleared the $365 resistance band and is now trading at its best level since early May. The next obvious level is the 200-day moving average near $389. The name hasn’t been above that 200-day since April 16, right before Q1 triggered the selloff and shattered confidence. If it can reclaim that longer-term trend line, you’re likely to hear the phrase “bottom is in” a lot more from longs.

Stepping back, here’s the story in one line: UnitedHealth didn’t solve all its structural problems in one quarter — margins in Medicare Advantage are still tight and Optum Health is still under pressure — but it showed enough control of cost, enough membership growth in government programs, enough cash generation, and enough confidence in 2025 EPS to convince the market this is repairable. After the year they’ve had, “repairable” is bullish.