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UnitedHealth Surpasses Revenue Expectations Post Cyberattack

UnitedHealth Group delivered an impressive performance in its first-quarter results, surpassing revenue expectations
April 16, 2024

UnitedHealth Group made waves with its latest first-quarter results, surpassing expectations despite grappling with the aftermath of a cyberattack on its subsidiary Change Healthcare. Here's a breakdown of their performance:

Earnings: Adjusted to $7.16 per share, beating analysts' expectations of $6.61, as reported by LSEG.

Revenue: Adjusted to $100.08 billion, exceeding the forecasted $99.26 billion by LSEG.

While UnitedHealth reported revenue of $99.80 billion, up from $91.9 billion year-over-year, this adjusted figure excludes the cyberattack's impact.

The company incurred a significant charge of around $7 billion from selling its Brazil operations, contributing to a net loss of $1.41 billion, or $1.53 per share, compared to last year's net income of $5.61 billion, or $5.95 per share.

Adjusted earnings stood at $6.91 per share for the quarter, with costs from the cyberattack categorized into "direct response" and "business disruption" expenses. The cyberattack's total impact in the first quarter was 74 cents per share, with a projected full-year impact between $1.15 and $1.35 per share.

Despite these challenges, UnitedHealth's medical cost ratio (MCR) reached 84.3%, surpassing analysts' expectations of 83.8%. This ratio indicates higher profitability, further boosting investor confidence.

Shares of UnitedHealth surged over 5% following the announcement, signaling optimism amidst a tumultuous period. Notably, the company comprises two major business units: Optum and UnitedHealthcare.

Optum reported robust revenue growth, reaching $61.1 billion, driven by expansions in patient care and pharmacy services. This growth was fueled by Optum's merger with Change Healthcare in 2022, which processed over 15 billion billing transactions annually.

UnitedHealth continues to navigate the fallout from the cyberattack, having advanced more than $6 billion to assist healthcare providers. Despite these challenges, CEO Andrew Witty expressed gratitude for colleagues' tireless efforts in restoring services and protecting the broader health system.

UnitedHealthcare, the company's insurance arm, reported revenue of $75.4 billion, with domestic consumer numbers increasing by 2 million in the first quarter.

Looking ahead, UnitedHealth updated its full-year earnings outlook, expecting to report between $17.60 and $18.20 per share, factoring in the cyberattack and the Brazil sale. CFO John Rex noted that UnitedHealthcare's claim submission activity has returned to normal post-cyberattack.

However, amidst its stellar performance, UnitedHealth faces scrutiny, with reports of a U.S. Department of Justice antitrust investigation emerging in late February. Despite these challenges, UnitedHealth remains resilient, driving innovation and delivering value to stakeholders in an ever-evolving healthcare landscape.

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