UnitedHealth Group reported better-than-expected revenue in its first-quarter results on Tuesday, though the corporate continues to be coping with the fallout from the cyberattack on its subsidiary Change Healthcare.
Here’s how the corporate did:
- Earnings: $6.91 per share adjusted, which can not compare with the $6.61 expected by analysts, in response to LSEG.
- Revenue: $99.8 billion, vs. $99.3 billion expected by LSEG.
UnitedHealth reported revenue growth of near 9% from $91.9 billion in the identical period last 12 months.
The corporate said it incurred a charge of around $7 billion through the quarter from selling its Brazil operations, in response to a release Tuesday. The currency effects from the Brazil sale in addition to hostile impacts from the cyberattack contributed to a net lack of $1.53 per share through the period, UnitedHealth said.
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 corporate said the entire 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 (MCR), 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 response to StreetAccount. A lower ratio typically indicates higher profitability.
Shares of UnitedHealth rose greater than 5% in premarket trading Tuesday. As of Monday’s close, the stock was down around 15% for the 12 months.
UnitedHealth is made up of two major business units: Optum and UnitedHealthcare. Optum offers a variety of pharmacy services, consulting services and provides medical take care of around 103 million consumers, in response to 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 12 months. UnitedHealth said Optum’s revenue growth was led by its patient care and pharmacy arms on account of “strong expansion” within the number of individuals served.
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 response to the corporate.
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 out a solution to fill prescriptions or receives a commission for his or her services.
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.
“The core story at UnitedHealth Group stays our colleagues delivering improved experiences for the people we serve and driving balanced growth even while swiftly and effectively addressing the attack on Change Healthcare,” UnitedHealth CEO Andrew Witty said in the discharge.
UnitedHealth’s other business unit, UnitedHealthcare, provides insurance coverage and profit services to tens of millions of Americans, in response to its website. UnitedHealthcare reported revenue of $75.4 billion for the primary quarter, up from $70.5 billion a 12 months ago.
The corporate said the expansion was driven by a rise within the variety of people who UnitedHealthcare serves within the U.S. The unit’s total variety of domestic consumers served grew by 2 million through the first quarter.
UnitedHealth said it updated its full-year net earnings outlook and expects to report between $17.60 to $18.20 per share, largely on account of the cyberattack and the Brazil sale. The corporate maintained an adjusted net earnings outlook of $27.50 to $28 per share.
UnitedHealth will hold its quarterly conference call with investors Tuesday at 8:45 a.m. ET.