Oct 28 (Reuters) - UnitedHealth UNH.N on Tuesday raised its annual profit forecast after reporting better-than-expected quarterly earnings as the U.S. health insurer kept medical costs in check.
UnitedHealth shares surged 6% in premarket.
The company earlier this year drastically cut its outlook, which had sent its shares plummeting.
Newly returned CEO Stephen Hemsley has been under pressure to regain investor and consumer trust in the wake of an unexpected surge in medical costs and Americans' anger at the high price of health care.
Hemsley, who has replaced several long-time executives, was brought in earlier this year as part of a management shakeup.
"We remain focused on strengthening performance and positioning for durable and accelerating growth in 2026 and beyond, and our results this quarter reflect solid execution toward that goal," said Hemsley.
For the third quarter ended September 30, the company's medical loss ratio - the percentage of premiums spent on medical care - stood at 89.9%, which was in line with the company's expectations. Insurers aim for a ratio close to around 80%.
Analysts on average had expected the company to report a ratio of 89.87%, according to LSEG data.
Quarterly revenue at its Optum health services unit was flat year-over-year at $25.9 billion.
Revenue at Optum Rx, UnitedHealth's pharmacy benefit manager, rose 16% to $39.7 billion, helped by higher prescription volumes from new clients and growth in existing clients.
The healthcare giant now sees 2025 adjusted profit per share to be at least $16.25, compared with its previous estimate of at least $16.00. This is higher than the average analyst estimate of $16.20 per share.
On an adjusted basis, the company earned a profit of $2.92 per share for the quarter, beating analysts' average estimate of $2.79.