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united health group reported higher-than-expected earnings. First quarter results However, the company continues to deal with the aftermath of the cyber attack on its subsidiary Change Healthcare.
The company’s initiatives include:
- Revenue: LSEG said it earned an adjusted $7.16 per share, compared to analysts’ expectations of $6.61.
- Revenue: Adjusted $100.08 billion, LSEG forecast $99.26 billion.
UnitedHealth reported revenue of $99.8 billion, up from $91.9 billion in the year-ago period. Adjusted sales of $100.08 billion do not include the impact of the cyber attack.
According to reports, the company announced that it incurred approximately $7 billion in charges during the quarter from the sale of its Brazilian operations. release Tuesday. UnitedHealth said currency effects from the Brazilian divestiture and negative impact from the cyber attack contributed to its net loss in the period. The company reported a net loss of $1.41 billion, or $1.53 per share, compared to net income of $5.61 billion, or $5.95 per share, in the same period last year.
UnitedHealth reported adjusted earnings of $6.91 per share for the quarter. The company said the adjusted figures do not include sales in Brazil, but only account for part of the impact from the cyberattack. The report categorized the impact of cyberattacks into two categories: “direct response” costs and “business interruption” costs.
Direct response initiatives, such as UnitedHealth’s efforts to restore the Change Healthcare platform, had an impact of 49 cents per share in the quarter. Change Healthcare’s business interruption costs, including lost revenue, amounted to 25 cents per share. UnitedHealth said its adjusted profit numbers include the impact of business interruption but exclude direct response costs. The adjusted EPS figure of $7.16 excludes the entire impact of the cyber attack.
The company said the total impact from the cyber attack in the first quarter was 74 cents per share, and it expects the full-year impact to be between $1.15 and $1.35 per share.
UnitedHealth reported a medical expense ratio (the amount of money spent on medical expenses per dollar of premiums) of 84.3% in the first quarter. The company said this includes a 40 basis point impact from cyberattacks. Analysts had expected MCR to be 83.8%, according to street accounts. A lower ratio usually indicates higher profitability.
UnitedHealth stock rose more than 7% in premarket trading Tuesday. As of Monday’s close, the stock had fallen about 15% since the beginning of the year.
UnitedHealth is comprised of two main business units: Optum and UnitedHealthcare. According to the company, Optum provides a variety of pharmacy and consulting services and provides healthcare to approximately 103 million consumers. Website.
Optum reported first-quarter sales of $61.1 billion, up from $54.1 billion in the same period last year. UnitedHealth said Optum’s sales growth was driven by its patient care and pharmacy divisions with “significant expansion” in the number of people served.
In 2022, Optum completed a $13 billion merger with Change Healthcare, which provides tools for payments and revenue cycle management. The company says Change Healthcare processes more than 15 billion billing transactions annually, and one in three patient records passes through its system.
united health revealed in February A cyber threat actor infiltrated part of Change Healthcare’s information technology network, requiring the company to immediately disconnect affected systems. The impact is far-reaching across the medical field, as many doctors are no longer able to write prescriptions or receive reimbursement for their services.
The company has been working in recent weeks to bring its systems back online, and UnitedHealth announced Tuesday that it has donated more than $6 billion to health care providers in need.
UnitedHealth said “significant progress” continues to be made in restoring services at Change Healthcare.
“UnitedHealth Group’s core story is to respond quickly and effectively to attacks on Change Healthcare, while delivering an improved experience for the people our colleagues serve and achieving balance. Our goal is to continue to drive sustainable growth,” UnitedHealth CEO Andrew Whitty said in a release.
UnitedHealthcare, another unit of UnitedHealth, provides insurance and benefits services to millions of Americans, according to its website. UnitedHealthcare reported first-quarter sales of $75.4 billion, up from $70.5 billion in the year-ago period.
The company said this growth was driven by an increase in the number of people UnitedHealthcare serves in the United States. The total number of domestic consumers served by the segment increased by 2 million during the first quarter.
UnitedHealth updated its full-year net income outlook, saying it expects to report earnings of $17.60 to $18.20 per share, primarily due to the cyber attack and the sale in Brazil.
UnitedHealth will hold its quarterly conference call with investors on Tuesday at 8:45 a.m. ET.