UnitedHealth Q3 Earnings Beat on Rising Commercial Membership

UnitedHealth Group Incorporated UNH reported third-quarter 2025 adjusted earnings per share (EPS) of $2.92, which beat the Zacks Consensus Estimate of $2.75. However, the bottom line declined 59.2% year over year.Revenues rose 12% year over year to $113.2 billion. The top line missed the consensus mark by 0.2%.The quarterly earnings were aided by growth in domestic commercial membership and strength witnessed in Optum Rx. However, elevated medical costs partially offset the positives.UnitedHealth Group Incorporated Price, Consensus and EPS Surprise UnitedHealth Group Incorporated price-consensus-eps-surprise-chart | UnitedHealth Group Incorporated QuoteBusiness Performance of UNHUnitedHealth’s third-quarter premium of $89 billion increased from $77.4 billion a year ago but missed the consensus mark by 0.2%.UNH’s medical care ratio (MCR) was 89.9% in the third quarter, which deteriorated 470 bps from the year-ago period. The metric was lower than the Zacks Consensus Estimate of 90.9% and our estimate of 91.1%. MCR witnessed an increase due to the previously noted reductions in Medicare funding and medical cost trend, which exceeded the pricing trend. Medical costs of $80 billion rose from $66 billion a year ago.Third-quarter total operating costs of $108.8 billion escalated 18.2% year over year due to higher medical costs, operating costs and the cost of products sold. The figure came higher than our model estimate of $108.7 billion. The third-quarter 2025 operating cost ratio deteriorated to 13.5% from 13.2% in 2024 due to investments.UnitedHealth’s operating earnings declined 50% year over year to $4.3 billion in the third quarter. The net margin deteriorated 390 bps to 2.1% from the year-ago period.Performance of UNH’s Business PlatformsRevenues of the health benefits business of UnitedHealth, UnitedHealthcare, advanced 16% year over year to $87.1 billion in the third quarter due to an increase in domestic commercial membership growth. The metric beat the Zacks Consensus Estimate of $87 billion.Earnings from operations amounted to $1.8 billion, down from $4.2 billion a year ago. The operating margin decreased 350 bps year over year to 2.1%.Revenues in the Optum business line were $69.2 billion, which rose 8% year over year due to strong contributions from Optum Rx. The figure surpassed the consensus mark of $67.7 billion.Optum’s earnings from operations declined to $2.5 billion from $4.5 billion a year ago. The operating margin of 3.6% decreased 340 bps year over year.UnitedHealth’s Medical MembershipThe UnitedHealthcare business catered to 50.1 million people as of Sept. 30, 2025, which grew 1.6% year over year due to its self-funded commercial benefits. However, the figure missed the Zacks Consensus Estimate and our estimate of 50.3 million.UNH’s Financial Position (As of Sept. 30, 2025)UnitedHealth exited the third quarter with cash and short-term investments of $30.6 billion, which rose from the 2024-end level of $29.1 billion.Total assets of $315.3 billion increased from the $298.3 billion figure at 2024-end.Long-term debt, less of current maturities, amounted to $72.4 billion, up 0.1% from the figure as of Dec. 31, 2024. Short-term borrowings and the current portion of long-term debt were $7.7 billion.Total equity of $101.6 billion advanced from the 2024-end level of $98.3 billion.UnitedHealth generated operating cash flows of $18.6 billion in the first nine months of 2025, which declined from the prior-year figure of $21.8 billion.UNH’s 2025 OutlookManagement now projects adjusted net EPS to be at least $16.25 for 2025, up from the previous guided figure of $16 compared with the 2024 figure of $27.66. Net earnings are now expected to be at least $14.9 billion, up from the 2024 level of $14.4 billion.Revenues were earlier projected between $445.5 billion and $448 billion in 2025, up from $400.3 billion in 2024. Operating cash flows were estimated to be $16 billion, down from $24.2 billion in 2024.UNH’s Zacks RankUNH currently carries a Zacks Rank #3 (Hold).Stocks to Report EarningsHere are three companies from the Medical space that are likely to report their respective quarterly earnings soon.ANI Pharmaceuticals, Inc. ANIP carries a Zacks Rank of 2 (Buy) at present. The Zacks Consensus Estimate for ANIP’s bottom line for the to-be-reported quarter is pegged at $1.74 per share, indicating 29.9% year-over-year growth. ANI Pharmaceuticals’ earnings beat estimates in each of the past four quarters, with an average surprise of 22.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Encompass Health Corporation EHC has a Zacks Rank of 2 at present. The Zacks Consensus Estimate for EHC’s bottom line for the to-be-reported quarter is pegged at $1.19 per share, indicating 15.5% year-over-year growth. Encompass Health’s earnings beat estimates in each of the past four quarters, with an average surprise of 14%.The Cigna Group CI currently has a Zacks Rank of 3. The Zacks Consensus Estimate for CI’s bottom line for the to-be-reported quarter of $7.70 per share indicates 2.5% year-over-year growth. It remained stable over the past week. Cigna Group’s earnings beat estimates in three of the last four quarters and missed once.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Cigna Group (CI): Free Stock Analysis Report ANI Pharmaceuticals, Inc. (ANIP): Free Stock Analysis Report Encompass Health Corporation (EHC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks