Berkshire Sold Too Soon? UnitedHealth Surges After Blowout Earnings, Higher Guidance

UnitedHealth Group Inc. (NYSE:UNH) reported better-than-expected second-quarter results on Thursday and raised its full-year 2026 earnings guidance, sending shares higher in premarket trading.

The gains come about two months after Berkshire Hathaway Inc. (NYSE:BRK) exited its entire stake in the health insurer.

Adjusted earnings came in at $6.38 per share, topping the analyst consensus estimate of $4.86. Revenue increased to $112.03 billion from $111.62 billion a year earlier and exceeded Wall Street expectations of $110.83 billion. GAAP earnings were $6.04 per share.

UnitedHealth Improves Medical Cost Performance

The company’s medical care ratio improved to 86.7% from 89.4% a year earlier, reflecting product design changes, pricing discipline and improved medical cost management. The quarter also benefited from $860 million of favorable prior-period reserve development.

Operating costs represented 12.7% of revenue, up from 12.3% a year ago, as UnitedHealth increased investments in technology, artificial intelligence, care delivery, consumer experience and community support. Cash flow from operations totaled $11.1 billion.

UnitedHealthcare And Optum Deliver Stronger Results

UnitedHealthcare generated $86.0 billion in revenue and $3.9 billion in operating earnings, with an operating margin of 4.6%, compared with 2.4% a year earlier. The insurance business served 48.5 million medical members during the quarter.

Optum reported $65.7 billion in revenue and $4.0 billion in operating earnings, representing 160 basis points of year-over-year margin expansion. The healthcare services business highlighted continued investments in AI-enabled products, including autonomous coding and digital prior authorization tools.

Guidance Raised Above Wall Street Estimates

UnitedHealth raised its full-year 2026 adjusted earnings guidance to a range of $19.50 to $20.00 per share, above the analyst consensus estimate of $18.43.

The company also increased its GAAP earnings outlook to $18.45 to $18.95 per share, compared with the consensus estimate of $17.12.

The company expects approximately $24 billion in operating cash flow for the year and plans to repurchase at least $5 billion of its shares.

“Our results and outlook reflect the continuing progress in our work to simplify how we operate, improve both affordability and the health care experience for patients and care providers, and apply modern technology to create real improvement for people,” said Stephen Hemsley, CEO of UnitedHealth.

UNH Price Action: UnitedHealth Group shares were up 7.21% at $448.70 during premarket trading on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data.

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