UnitedHealth

Third quarter operating earnings hit 6.6 billion dollars, up from about 4.3 billion a year earlier, even though revenue was roughly flat at 112.7 billion dollars. The share of premiums spent on medical care fell to 88.4% from 89.9%, and management raised its 2026 adjusted earnings target to at least 20.50 dollars per share.

The company produced about 5.1 billion dollars of operating cash flow in the quarter and roughly 24 billion dollars so far this year. It has bought back about 5 billion dollars of its own stock this year and pays a dividend yielding around 2.5%, while debt as a share of total capital improved to 41.7%.

Revenue is flat because management is deliberately dropping unprofitable Medicare and Medicaid members, and the company now serves about 2.5% fewer people than a year ago. Some of the quarter's cost improvement also came from a one-time 610 million dollar release of reserves, so the recovery leans on cost cuts rather than growth.

UnitedHealth does not control how much care its members use or what government programs pay. Commercial medical costs are still rising at more than 11%, and Medicaid margins are still slightly negative. Profits are also well below the peak of two years ago, so one bad surprise on costs could set the turnaround back.