UnitedHealth Group Beats Expectations Despite Cyberattack Costs
UnitedHealth Group has managed to exceed first-quarter expectations despite facing costs from a recent cyberattack that targeted its Change Healthcare business. The company reported that care patterns in the first quarter met expectations, following a period of soaring medical costs in the previous year.
Shares of UnitedHealth jumped during midday trading after the earnings report was released, signaling investor confidence in the company’s ability to weather the challenges posed by the cyberattack. The attack on Change Healthcare disrupted payment and claims processing across the country, leading federal investigators to look into whether protected health information was exposed.
The cyberattack resulted in an $872 million hit for UnitedHealth in the first quarter. Additionally, the company incurred a $7 billion charge for selling a Brazilian health benefits and care provider. Despite these setbacks, total revenue for the company grew more than 8% to reach $99.8 billion.
Adjusted earnings per share were reported at $6.91, surpassing analyst expectations. However, the impact of the cyberattack is estimated to reduce earnings by $1.15 to $1.35 per share for the year. Despite this, UnitedHealth reaffirmed its 2024 earnings forecast of $27.50 to $28 per share, with analysts expecting earnings of $27.50 per share.
In response to the positive earnings report, company shares rose more than 5% to $469.04. This strong performance in the face of adversity demonstrates UnitedHealth’s resilience and ability to adapt to challenges in the ever-evolving healthcare industry.
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