UnitedHealth Group, a major player in the healthcare industry, has exceeded expectations in the first quarter of the year, despite the financial impact of a cyberattack on its Change Healthcare business. The company also reported that care patterns in the first quarter were in line with their projections, following a surprise increase in medical costs at the end of the previous year.
The cyberattack, carried out by a ransomware group, disrupted payment and claims processing nationwide, causing stress for healthcare providers and their patients. Federal civil rights investigators are looking into whether the attack exposed any protected health information. UnitedHealth is still working to restore several services affected by the February attack, which cost the company $872 million in the first quarter. However, CEO Andrew Witty assured analysts that Change Healthcare would emerge stronger than before.
In addition to the cyberattack, UnitedHealth also recorded a $7 billion charge related to the sale of a Brazilian health benefits and care provider it had acquired more than a decade ago. As a result, the company reported an overall loss of $1.41 billion for the first quarter, despite an 8% increase in total revenue to $99.8 billion.
Adjusted earnings, which excluded costs related to the Brazilian business sale and some expenses from the cyberattack, amounted to $6.91 per share, surpassing analysts’ expectations of $6.61 per share. The total costs associated with the cyberattack and recovery efforts were 74 cents per share, with direct response costs accounting for 49 cents of that amount.
UnitedHealth reaffirmed its 2024 earnings forecast, projecting adjusted earnings of $27.50 to $28 per share, in line with analysts’ expectations. The company’s shares climbed more than 5% in midday trading following the announcement, with analysts attributing the positive reaction to the absence of a guidance cut that some had anticipated.
The Associated Press contributed to this article.