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By Brian Nelson, CFA
On April 21, UnitedHealth Group (UNH) reported better than feared first quarter results with both revenue and non-GAAP earnings coming in higher than the consensus estimates. First-quarter 2026 revenues grew 2%, to $111.7 billion, while adjusted earnings per share came in at $7.23 compared to $7.20 in the year-ago period. Earnings from operations in the quarter was $9.0 billion, down from $9.1 billion in the first quarter of 2025, while its first-quarter 2026 medical care ratio fell to 83.9% compared to 84.8% in the first quarter of last year. Its first-quarter 2026 operating cost ratio was 13.8%, compared to 12.4% in 2025.
Management noted that it continues “to help simplify and modernize health care for the people and care providers (it) serve(s), bringing greater value, affordability, transparency, and connectivity.” In the first quarter of 2025, UnitedHealthcare served 49.1 million consumers and expanded operating margins by 40 basis points, to 6.6%. Optum supported more than 122 million consumers across its businesses, driving earnings of $3.3 billion, reflecting a margin of 5.2%. Cash flow from operations were $8.9 billion, or 1.4x net income, and its debt-to-capital ratio was 42.9% as of March 31, 2026.
UnitedHealth continues to refocus the organization on U.S. healthcare, exiting non-U.S. businesses, accelerate simplification and modernization — including substantial artificial intelligence and cybersecurity investments – and advance meaningful changes in areas such as data and process interoperability, prior authorization, transparency, pharmacy practices and more. Management entered into an arrangement to buy back at least $2 billion of its common stock, which it expects to complete by the end of the second quarter of 2026. As it relates to 2026 guidance, adjusted earnings are now expected to be greater than $18.25 per share, up from $17.75 per share previously. We continue to like UnitedHealth as an idea in the Best Ideas Newsletter portfolio.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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