UnitedHealth Group released its first-quarter earnings Tuesday morning as the industry continues to reel from the massive cyberattack on its Change Healthcare unit.
UHG reported a loss of $1.4 billion in the quarter, compared to $5.6 billion in profit for the first quarter of 2023. Revenues reached $99.8 billion, up from $91.9 billion in the prior-year quarter. The hack was a major factor in the company's performance, along with the sale of its Brazil-based business Amil, which drove $7 billion charge in the quarter.
After adjustments for one-time costs and gains, the company posted $6.91 in earnings per share. Both figures surpassed Wall Street's expectations, according to analysts at Zacks Investment Research.
The company was trading up at market open, with shares up 6% at about 10 a.m. ET.
In the release, UHG said it "continues to make significant progress" in restoring the services impacted in the breach while offering critical financial support to effected providers. UHG has offered more than $6 billion in advanced funding and interest-free loans to date.
The company said it expects the cyberattack to have a impact of between $1.15 and $1.35 in earnings per share for the full year, including $0.49 in the first quarter alone. That drag on earnings allowed UnitedHealth to restore Change Healthcare's clearinghouse platform as well as suspend certain care management procedures so its providers could operate more nimbly.
UHG said the cyberattack will likely drive between $0.30 and $0.40 per share in business disruption for the full year, according to the release.
Overall, the company reported $872 million in impacts related to the cyberattack in the first quarter. For the full year, it expects that to total between $1.35 billion and $1.6 billion, reflecting both direct response costs and business disruption combined.
CEO Andrew Witty told investors on the company's earnings call Tuesday morning that despite the cyberattack's ongoing challenges, UHG still expects to meet its guidance for 2024 of between $27.50 and $28.00 per share.
"This was an unprecedented attack by a malicious actor on the U.S. health system," Witty said. "Fortunately, we were able to bring to bear the substantial resources of UnitedHealth Group resources, which a standalone Change Healthcare would not have had access to on its own."
UnitedHealth closed its $8 billion acquisition of Change Healthcare in October 2022 after overcoming a legal challenge from the Department of Justice. Critics have expressed concern about this deal in the wake of the cyberattack, which was felt in all corners of the industry.
Roger Conner, CEO of OptumInsight, where Change Healthcare now resides, did acknowledge that the company has plenty of work ahead with clients who connected to another clearinghouse platform during the cyberattack to maintain claims flow.
He said that the portfolio of offerings within Optum as well as the financial support and other steps taken to assist clients during the cyberattack response are key factors in rebuilding any lost trust.
"When you add those elements, we're confident," he said.