UnitedHealth Group's top line has barely moved through the first three quarters of 2026, while the profit beneath it has shrunk every quarter. In its 10-Q filings for the quarters ended March 31, June 30 and September 30, 2026, the company reported total revenues of $111.7 billion, $112.0 billion and $112.7 billion. Over the same stretch, operating income fell from $9.0 billion to $8.0 billion and then to $6.6 billion. The gap between those two lines is where the story sits.
| Line item | Q1 2026 | Q2 2026 | Q3 2026 |
|---|---|---|---|
| Total revenues | $111.7B | $112.0B | $112.7B |
| Premiums earned, net | $87.6B | $87.0B | $87.1B |
| Benefits and claims incurred, net | $73.5B | $75.4B | $77.0B |
| Selling, general and administrative | $15.4B | $14.3B | $14.4B |
| Operating income | $9.0B | $8.0B | $6.6B |
| Net income | $6.3B | $5.5B | $4.1B |
| Diluted earnings per share | $6.90 | $6.04 | $4.56 |
Revenue rose by about $1.0 billion from the first quarter to the third. Operating income fell by about $2.4 billion over the same period, and net income fell by about $2.2 billion. Diluted earnings per share went from $6.90 to $4.56, a decline of roughly a third, while the diluted share count dropped only modestly, from 910 million to 902 million.
Where the squeeze shows up
The cost lines explain most of the gap. In the 10-Q for the third quarter, benefits and claims incurred, net, came to $77.0 billion, up from $73.5 billion in the first quarter. That is an increase of roughly $3.5 billion. Premiums earned, net, moved in the opposite direction, slipping from $87.6 billion to $87.1 billion. The company is collecting about the same premium dollars while paying out more in medical benefits each quarter.
Dividing benefits and claims by premiums earned, using the reported line items, gives a rough measure of that pressure. The ratio was about 83.9% in the first quarter, 86.7% in the second and 88.4% in the third. That is our arithmetic from the filings, not a figure the company reported in these quarterly documents. The direction is what matters: each quarter, a larger share of premium revenue went to medical costs.
The other cost lines did not offset this. Cost of goods and services sold rose from $12.8 billion in the first quarter to $13.7 billion in the third. Selling, general and administrative expense fell by about $1.0 billion between the first and third quarters, with most of that drop arriving in the second quarter, and that reduction was not enough to cover the rise in medical costs. Interest expense was roughly flat at about $955 million to $963 million per quarter.
Put simply, the increase in benefits and claims by itself is larger than the entire decline in operating income. Revenue growth and the lower overhead cost were not enough to offset it. Operating margin, calculated from the reported figures, moved from about 8.0% of revenue in the first quarter to about 7.1% in the second and about 5.8% in the third.
Year-over-year context
The sequential decline inside 2026 is the cleanest signal, but the year-over-year picture is more mixed and should be read alongside it. Per the company's reported figures, third-quarter 2026 operating income of $6.6 billion compares with $4.3 billion in the third quarter of 2025, and third-quarter 2026 revenue of $112.7 billion is slightly below the $113.2 billion reported for the third quarter of 2025. The first quarter of 2026 operating income of $9.0 billion was close to the $9.1 billion reported for the first quarter of 2025. In other words, the 2026 decline is most visible against the first quarter of this year, not against the weak third quarter of 2025.
What management has said about the drivers
The company's most recent annual MD&A summary, covering fiscal 2025, attributes the earnings decline of that year to elevated medical cost trend, a medical care ratio of 89.1% compared with 85.5% in 2024, Medicare Advantage funding reductions, and $2.5 billion of restructuring and other actions. Those themes line up with the 2026 cost pattern in the quarterly line items. The same summary says management expects Medicare Advantage membership and Optum Health value-based care populations to contract in 2026, and it describes the 2027 Medicare Advance Notice as far below trend. It also notes continued margin pressure in Medicaid, with expected membership losses there.
The annual summary also records that operating cash flow fell to $19.7 billion in 2025 from $24.2 billion in 2024, and that the credit ratings carry negative outlooks at Moody's, S&P and Fitch. Those are reported facts about the business and its balance sheet. They do not, by themselves, tell a reader how the next several quarters will unfold.
What the filings do and do not settle
The reported figures establish three things. Revenue has been nearly flat. Benefit costs have risen faster than premiums each quarter. And profit has fallen in step with that gap. What the line items cannot show is whether the medical cost trend is stabilizing, how much of the increase reflects membership mix, or how much the company expects to recover through pricing and cost actions. The company did not disclose those points in the figures used here, and this piece does not attempt to fill them in.
For a value investor, the useful question is narrower than whether the quarterly decline continues. It is whether the business can keep premiums ahead of medical costs at a level that supports the earnings base the company has reported in the past. The third-quarter medical cost ratio, calculated at about 88.4% from the reported lines, is the number to track in the next filings, alongside the membership commentary the company has already flagged for 2026.