Despite the impact from cyberattack, UnitedHealth beats revenue

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UnitedHealth Group reported better-than-expected revenue in its first-quarter results on Tuesday, though the company is still dealing with the fallout from the cyberattack on its subsidiary Change Healthcare.
Here’s how the company did: Earnings: $7.16 per share adjusted, vs. $6.61 expected by analysts, according to 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 same period last year.
The adjusted $100.08 billion revenue figure excludes the impact from the cyberattack.
UnitedHealth reported adjusted earnings of $6.91 per share for the quarter.
The company said the adjusted figure excludes the Brazil sale, but only part of the impact from the cyberattack.
UnitedHealthcare reported revenue of $75.4 billion for the first quarter, up from $70.5 billion a year ago.

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Although the company is still coping with the fallout from the cyberattack on its subsidiary Change Healthcare, UnitedHealth Group posted better-than-expected revenue in its first-quarter results on Tuesday.

This is how the business performed:.

adjusted earnings per share of $7.16 vs. LSEG reports that analysts were expecting $6.61.

Revenue: $100.08 billion adjusted, vs. LSEG projects $99.26 billion.

Revenue for UnitedHealth was $99.80 billion, up from $91.9 billion during the same time previous year. The impact of the cyberattack is not included in the adjusted $100.08 billion revenue figure.

The business said in a release on Tuesday that it took a charge of about $7 billion in the quarter related to selling its operations in Brazil. According to UnitedHealth, there was a net loss for the time due to the negative effects of the cyberattack and the currency effects from the Brazil sale. The business declared a $1.41 billion net loss, or $1.53 per share, as opposed to a $5.61 billion net income, or $5.95 per share, in the previous year.

For the quarter, UnitedHealth reported adjusted earnings per share of $6.91. The Brazil sale is not included in the adjusted figure, according to the company, but only a portion of the cyberattack’s effects are. It classified the costs of the cyberattack into two groups: “direct response” and “business disruption.”.

The impact of direct response initiatives during the quarter, such as UnitedHealth’s attempt to restart Change Healthcare platforms, was 49 cents per share. Costs associated with business disruption, such as lost Change Healthcare income, came to 25 cents per share. According to UnitedHealth, the impacts of business disruption were included in its adjusted earnings figure, but the direct response costs were not. The full impact of the cyberattack is not included in the $7.16 adjusted EPS figure.

During the first quarter, the company reported that the total impact of the cyberattack was 74 cents per share; for the entire year, the company anticipates an impact of between $1.15 and $1.35 per share.

During the first quarter, UnitedHealth disclosed a medical cost ratio of 84.3%, which represents the percentage of each premium dollar allocated to medical expenses. The company stated that this included 40 basis points of impact from the cyberattack. According to StreetAccount, analysts were anticipating an MCR of 83.8%. In general, a lower ratio denotes greater profitability.

Tuesday morning, UnitedHealth’s stock increased by over 5%. By Monday’s close, the stock had lost about 15% of its value this year.

Optum and UnitedHealthcare are the two main business divisions that comprise UnitedHealth. According to the company website, Optum offers a variety of pharmacy services, consulting services, and medical care for about 103 million customers.

First-quarter revenue for Optum was $611 billion, up from $541 billion during the same period in the previous year. Due to a “strong expansion” in the number of individuals served, Optum’s patient care and pharmacy divisions drove the company’s revenue growth, according to UnitedHealth.

Payment and revenue cycle management tools provider Change Healthcare and Optum completed a $13 billion merger in 2022. Over 15 billion billing transactions are processed by Change Healthcare each year, and the company claims that one out of every three patient records goes through its systems.

A cyberthreat actor compromised a portion of Change Healthcare’s IT network, as UnitedHealth revealed in February. As a result, the affected systems were immediately disconnected by the company. Many doctors were left without a way to fill prescriptions or get paid for their services, which had far-reaching effects on the health-care industry.

UnitedHealth announced on Tuesday that it has advanced more than $6 billion to healthcare providers in need of support. The company has been working to bring systems back online in recent weeks.

As it works to restore Change Healthcare’s services, UnitedHealth said it is making “significant progress.”.

“We have so much to be thankful for in our colleagues’ unwavering dedication to working day and night to protect the larger health system, restore services, and free up funding for providers. “During the company’s quarterly investor call, UnitedHealth CEO Andrew Witty stated.

On its website, UnitedHealthcare, the other business unit of UnitedHealth, states that it offers insurance and benefit services to millions of Americans. UnitedHealthcare increased its revenue from $70.5 billion to $75.4 billion in the first quarter of this year.

The company claimed that the rise in the number of Americans served by UnitedHealthcare was the main factor in the growth. s. During the first quarter, the unit’s total number of domestic customers served increased by 2 million.

Mostly as a result of the cyberattack and the Brazil sale, UnitedHealth said that it has revised its outlook for full-year net earnings and anticipates reporting between $17,60 and $18,20 per share.

UnitedHealthcare is “pretty much back to normal in terms of claim submission activity” following the cyberattack, according to CFO John Rex during the company’s earnings call. Claims are coming in as anticipated, he said.

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