UnitedHealth profit and outlook signal start of turnaround

Strong financial results are hinting at a turnaround for UnitedHealth Group investors.

The Eden Prairie-based health care giant increased its profit outlook for the year and reported first quarter revenue and earnings that surpassed analyst expectations.

The company, which runs the massive UnitedHealthcare health insurance business, said in a quarterly call with investors that it better controlled medical costs between January and March while continuing investments in artificial intelligence technology to boost efficiency.

The company’s share price Tuesday, April 21, increased more than 7% in pre-market trading.

“We’re encouraged by the way the year has started,” Stephen Hemsley, the UnitedHealth Group chief executive officer, told investors.

It’s been a rocky road for UnitedHealth Group investors since November 2024, when the company’s stock was trading at more than $600 and setting records.

Rising medical costs and surprisingly poor financial performance drove a stunning sell-off during the first half of last year. The decline followed the December 2024 killing of UnitedHealthcare CEO Brian Thompson, as he walked on a public sidewalk to an investor conference in New York City.

For much of the past year, UnitedHealth Group shares have languished at less than $350.

The company in January forecast its first annual revenue decline in more than a decade, but the outlook Tuesday improved considerably.

UnitedHealth Group said it posted a profit of $6.28 billion during the first quarter on $111.7 billion in revenue. Analysts expected revenue of about $109.7 billion.

Adjusted earnings per share came in at $7.23, far surpassing the $6.61 expected by analysts.

The company said it now expects adjusted earnings per share of more than $18.25 this year, up from the $17.75 forecast in January.

“We are seeing early signs of improved alignment between pricing and medical cost trends,” said Wayne DeVeydt, the company’s chief financial officer.

The numbers amounted to a second win this month for the company, coming just over two weeks after the federal government announced payment rates for Medicare Advantage health plans in 2027 will be higher than first forecast in January.

The government’s initial rate notice drove a one-day 20% decline in the company’s share price in January.

UnitedHealthcare is the nation’s largest seller of Medicare Advantage health plans to seniors.

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