UnitedHealth Group reported better-than-expected revenue in its first-quarter results on Tuesday, though the corporate remains to be coping with the fallout from the cyberattack on its subsidiary Change Healthcare.
Here’s how the corporate did:
- Earnings: $7.16 per share adjusted, vs. $6.61 expected by analysts, in keeping with LSEG.
- Revenue: $100.08 billion adjusted, vs. $99.26 billion expected by LSEG.
UnitedHealth reported revenue of $99.80 billion, up from $91.9 billion in the identical period last yr. The adjusted $100.08 billion revenue figure excludes the impact from the cyberattack.
The corporate said it incurred a charge of around $7 billion throughout the quarter from selling its Brazil operations, in keeping with a release Tuesday. The currency effects from the Brazil sale in addition to antagonistic impacts from the cyberattack contributed to a net loss throughout the period, UnitedHealth said. The corporate reported it had a net lack of $1.41 billion, or $1.53 per share, compared with net income of $5.61 billion, or $5.95, a share, a yr earlier.
UnitedHealth reported adjusted earnings of $6.91 per share for the quarter. The corporate said the adjusted figure excludes the Brazil sale, but only a part of the impact from the cyberattack. It broke down the consequences from the cyberattack into two categories: “direct response” and “business disruption” costs.
Direct response efforts, like UnitedHealth’s effort to revive Change Healthcare platforms, amounted to an impact of 49 cents per share within the quarter. Business disruption costs, like lost Change Healthcare revenue, amounted to 25 cents per share. UnitedHealth said its adjusted earnings figure included the business disruption impacts, but excluded the direct response costs. The $7.16 adjusted EPS figure excludes the whole impact from the cyberattack.
The corporate said the whole impact from the cyberattack in the primary 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 cost ratio, which is the quantity of each premium dollar that goes toward medical costs, of 84.3% for the primary quarter. That included 40 basis points of impact from the cyberattack, the corporate said. Analysts were expecting an MCR of 83.8%, in keeping with StreetAccount. A lower ratio typically indicates higher profitability.
Shares of UnitedHealth rose greater than 5% Tuesday morning. As of Monday’s close, the stock was down around 15% for the yr.
UnitedHealth is made up of two major business units: Optum and UnitedHealthcare. Optum offers a spread of pharmacy services, consulting services and provides medical look after around 103 million consumers, in keeping with the corporate’s website.
Optum reported $61.1 billion in revenue for the primary quarter, up from $54.1 billion in the identical period last yr. UnitedHealth said Optum’s revenue growth was led by its patient care and pharmacy arms as a result of “strong expansion” within the number of individuals served.Â
In 2022, Optum accomplished a $13 billion merger with Change Healthcare, which offers tools for payment and revenue cycle management. Change Healthcare processes greater than 15 billion billing transactions annually, and one in every three patient records passes through its systems, in keeping with the corporate.Â
UnitedHealth disclosed in February that a cyberthreat actor breached a part of Change Healthcare’s information technology network, prompting the corporate to instantly disconnect the affected systems. The fallout has been far reaching across the health-care sector, as many doctors were left with no technique to fill prescriptions or receives a commission for his or her services.  Â
The corporate has been working to bring systems back online in recent weeks, and UnitedHealth said Tuesday that it has advanced greater than $6 billion to health-care providers in need of assistance.
UnitedHealth said it continues to make “significant progress” in restoring Change Healthcare’s services.
“I’m immensely grateful for our colleagues who proceed to work tirelessly — day and night — to revive services, liberate funds for providers and protect the broader health system.,” UnitedHealth CEO Andrew Witty said throughout the company’s quarterly call with investors.
UnitedHealth’s other business unit, UnitedHealthcare, provides insurance coverage and profit services to tens of millions of Americans, in keeping with its website. UnitedHealthcare reported revenue of $75.4 billion for the primary quarter, up from $70.5 billion a yr ago.Â
The corporate said the expansion was driven by a rise within the variety of folks that UnitedHealthcare serves within the U.S. The unit’s total variety of domestic consumers served grew by 2 million throughout the first quarter.
UnitedHealth said it updated its full-year net earnings outlook and expects to report between $17.60 and $18.20 per share, largely as a result of the cyberattack and the Brazil sale.Â
Through the company’s earnings call, UnitedHealth CFO John Rex said UnitedHealthcare is “just about back to normal when it comes to claim submission activity” within the wake of the cyberattack. He said claims are flowing as expected.
In late February, the U.S. Department of Justice reportedly launched an antitrust investigation into UnitedHealth, in keeping with a report from the Wall Street Journal. The corporate declined to comment on the matter during its investor call.
