Minnetonka, Minnesota – UnitedHealth Group’s first-quarter financial report fell short of analyst expectations, with adjusted earnings of $6.91 per share compared to the anticipated $6.61. Despite revenue growth of nearly 9%, reaching $99.8 billion, the company faced challenges such as a $7 billion charge from the sale of its Brazil operations, leading to a net loss of $1.41 billion. The cyberattack experienced during the quarter also impacted UnitedHealth’s financial performance.
The effects of the cyberattack, which included direct response and business disruption costs, amounted to a total impact of 74 cents per share. The company expects the full-year impact to range between $1.15 and $1.35 per share. UnitedHealth reported a medical cost ratio of 84.3% for the first quarter, slightly higher than analyst expectations of 83.8%.
Shares of UnitedHealth rose more than 7% in premarket trading following the earnings report. The company, consisting of two major business units – Optum and UnitedHealthcare, saw Optum’s revenue rise to $61.1 billion, driven by growth in patient care and pharmacy services. In a strategic move in 2022, Optum completed a $13 billion merger with Change Healthcare, a provider of payment and revenue cycle management tools.
The cyberattack on Change Healthcare’s IT network affected various aspects of the healthcare sector, disrupting operations for many providers. UnitedHealth has been working diligently to restore services and has provided over $6 billion in assistance to healthcare providers in need. CEO Andrew Witty emphasized the company’s commitment to improving customer experiences and driving balanced growth despite the challenges faced.
UnitedHealthcare, the company’s insurance coverage and benefit services unit, reported revenue of $75.4 billion for the first quarter, showing growth from the previous year due to an increase in the number of consumers served. The company updated its full-year net earnings outlook, expecting to report between $17.60 and $18.20 per share, taking into account the impact of the cyberattack and the Brazil sale. The adjusted net earnings outlook remained at $27.50 to $28 per share.
Investors will have the opportunity to learn more about UnitedHealth’s performance and future outlook during the quarterly conference call scheduled for Tuesday at 8:45 a.m. ET.