UnitedHealth Group beat first-quarter expectations even as costs fell from a Cyber attacks are changing healthcare Business ate into the company's performance.
The healthcare giant also said Tuesday that first-quarter care patterns met its expectations after a spike in medical costs at the end of last year surprised Wall Street.
The company's shares jumped in midday trading.
UnitedHealth said earlier this year that a ransomware group gained access to some of its Change Healthcare business systems, which provide the technology used to submit and process insurance claims. The attack disrupted payment and claims processes across the country, putting pressure on doctors' offices and health care systems.
Federal civil rights investigators They are looking into whether protected health information was exposed in the attack.
UnitedHealth is still restoring many services from the February attack. It took in $872 million of it in the first quarter, but CEO Andrew Witty told analysts on Tuesday that the company expects to bring back Change Healthcare “much stronger than it was before.”
UnitedHealth also booked nearly $7 billion in the quarter for the sale of a Brazilian health benefits company and care provider it bought more than a decade ago.
Overall, the company lost $1.41 billion in the first quarter. Total revenue grew more than 8% to $99.8 billion.
Total adjusted earnings were $6.91 per share. This excluded the cost of selling the Brazilian company and some expenses associated with the cyber attack.
Analysts expected earnings of $6.61 per share on revenue of $99.23 billion.
UnitedHealth provides health insurance to more than 49 million people in the United States. The Optum segment also provides care, operates one of the nation's largest pharmacy benefit management companies and provides technology services.
Costs associated with the cyberattack and recovery totaled 74 cents per share in the quarter. About two-thirds of that amount, or 49 cents, were direct response costs that the company excluded from adjusted earnings.
This includes increased medical expenses incurred by the Company as a result of the suspension of its prior approval or prior authorization requirements for certain care.
UnitedHealth expects the full impact of the cyber attack to reach $1.15 to $1.35 per share in earnings this year.
The Minnetonka, Minn., company on Tuesday also reaffirmed the 2024 earnings forecast it first laid out last fall for adjusted earnings of $27.50 to $28 per share.
Analysts expect earnings of $27.50 per share.
The company's shares rose more than 5% to $469.04 in midday trading Tuesday. The Dow Jones Industrial Average, of which UnitedHealth is a member, rose slightly.
The positive stock reaction was not surprising because the stock fell partly in anticipation of the guidance cut, Jefferies analyst David Windley said in a research note.
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