UnitedHealth’s 1Q Profits Exceed Expectations Despite Cyberattack Costs

UnitedHealth Group, a major health care giant, reported that its care patterns in the first quarter of the year met expectations, leading to a surge in company shares in early-morning trading. This positive news comes after the company faced challenges in the previous year, including soaring medical costs and a cyberattack on its Change Healthcare business.

The ransomware attack, which occurred in February, disrupted payment and claims processing across the country, causing stress for doctor’s offices and health care systems. UnitedHealth is still in the process of restoring several services impacted by the attack, which resulted in an $872 million hit in the first quarter.

In addition to the cyberattack, UnitedHealth also booked a $7 billion charge for selling a Brazilian health benefits and care provider business it acquired over a decade ago. Despite these challenges, the company reported a total revenue growth of over 8% to $99.8 billion in the first quarter.

Adjusted earnings for the quarter totaled $6.91 per share, surpassing analysts’ expectations. UnitedHealth reaffirmed its 2024 earnings forecast and expects to absorb most of the impact of the cyberattack in the first quarter.

Following the positive earnings report, company shares climbed more than 7% in premarket trading. Analysts believe that the stock’s recent performance, which had been down 15% earlier in the year, was partially due to anticipation of a guidance cut. The strong share reaction reflects investor confidence in UnitedHealth’s ability to navigate challenges and deliver solid financial results.