UnitedHealth Stock Jumps on Earnings Beat in First Quarterly Report Since Cyberattack

UnitedHealth Group (UNH) shares jumped over 7% in pre-market trading Tuesday after the company reported first-quarter results that surpassed analyst estimates, despite a cyberattack that disrupted some of its operations.

The healthcare giant reported an 8% year-over-year rise in revenue to $99.8 billion, but posted a loss of $1.22 billion in the quarter, largely due to the impact of a cyberattack and a $7 billion charge related to the sale of the company’s operations in Brazil, which was announced late last year.

Adjusting for that $7 billion one-time charge and the hundreds of millions related to the company’s response to the cyberattack that disrupted some of its operations starting in February, UnitedHealth posted an adjusted profit of $6.43 billion for the quarter or $6.91 per share. Revenue, adjusted net income, and adjusted earnings per share (EPS) all beat analyst estimates compiled by Visible Alpha.

“The company continues to make significant progress in restoring the affected Change Healthcare services while providing financial support to impacted health care providers,” United said in a statement. “To date, the company has provided over $6 billion in advance funding and interest-free loans to support care providers in need.” In March, the company said it had provided over $2 billion to its care providers.

The cyberattack also had an impact on UnitedHealth’s medical loss ratio, which is the percentage of premiums a health insurer pays out to cover claims, with a higher ratio indicating less room for the company to make a profit. UnitedHealth’s medical care ratio as it refers to the metric was 84.3% in the first quarter, up from 82.2% in the year-ago quarter because of the cyberattack, as well as “revenue effects of the Medicare funding reductions,” UnitedHealth said.

UnitedHealth shifted its full-year EPS to $17.60 to $18.20 per share to account for the costs of the Brazil sale and cyberattack, while maintaining its full-year adjusted EPS projection of $27.50 to $28.

UnitedHealth stock tumbled earlier this year as reports emerged that the company was the subject of a Department of Justice (DOJ) antitrust probe.

UnitedHealth shares were up 7.9% at $481.10 in pre-market trading after its earnings report was released. They’ve lost about 18% of their value since the start of the year.