UnitedHealth Group (UNH) recently released its first-quarter financial results for 2024, surpassing revenue expectations despite challenges faced due to a cyberattack on its subsidiary, Change Healthcare. The company performed exceptionally well, with earnings at $6.91 per share adjusted, exceeding analyst expectations of $6.61. Revenue stood at $99.8 billion, higher than the anticipated $99.3 billion.
The company experienced a revenue growth of nearly 9% compared to the same period last year, reaching $91.9 billion. However, UnitedHealth incurred a charge of approximately $7 billion from divesting its Brazil operations during the quarter. This, along with currency effects from the sale and negative impacts of the cyberattack, led to a net loss of $1.53 per share.
UnitedHealth detailed the effects of the cyberattack on its earnings, prioritizing “direct response” efforts like restoring Change Healthcare platforms, amounting to a 49 cents per share impact. Additionally, “business disruption” costs, including lost revenue from Change Healthcare, resulted in a 25 cents per share impact. The total cyberattack impact for the quarter was 74 cents per share, projected to range between $1.15 and $1.35 per share for the full year.
The company reported an 84.3% medical cost ratio (MCR) for the first quarter, slightly above analyst expectations. UnitedHealth saw a surge of over 5% in premarket trading following the announcement, despite being down approximately 15% for the year thus far.
UnitedHealth comprises two major business units: Optum and UnitedHealthcare. Optum witnessed revenue growth to $61.1 billion, mainly driven by its patient care and pharmacy services due to expanded consumer reach. On the other hand, UnitedHealthcare reported revenue of $75.4 billion, attributed to an increase in the number of consumers served within the U.S during the quarter.
The company’s full-year net earnings outlook was adjusted due to the cyberattack and Brazil sale, expecting to report between $17.60 to $18.20 per share. The adjusted net earnings outlook remains at $27.50 to $28 per share. UnitedHealth is actively working on restoring Change Healthcare’s services and addressing the aftermath of the cyberattack.
UnitedHealth CEO Andrew Witty expressed confidence in handling the situation, highlighting the company’s commitment to providing exceptional service to its customers amidst challenges. The company also aims to hold its quarterly conference call with investors to provide further insights into its performance and future strategies.
