UnitedHealth Q2 Earnings: Revenue And EPS Beat, Lifts Cyberattack Impact Estimate, Reaffirms Profit Outlook

Tuesday, UnitedHealth Group UNH reported better-than-expected second-quarter 2024 earnings.

The company reported adjusted EPS of $6.80, up from $6.14 a year ago, beating the consensus of $6.66.

UnitedHealth's revenues increased nearly $6 billion (+6.4% Y/Y) to $98.86 billion, beating the consensus of $98.34 billion, led by expansion in people served domestically at Optum and UnitedHealthcare.

Cyberattack Update: The company said it has restored most of the affected Change Healthcare services and has provided over $9 billion in advance funding and interest-free loans to support care providers.

Total cyberattack impacts in the second quarter were $0.92 per share.

Adjusted earnings from operations of $8.7 billion include the Change Healthcare business disruption impacts, excluding the cyberattack direct response and South American impacts.

Related: Medicare Agency To End Advance Payments Following UnitedHealth Cyberattack.

UnitedHealth reported a medical cost ratio (MCR) of 85.1% for the second quarter, including 65 basis points of impacts due to accommodations to support care providers (40 basis points) and South American actions (25 basis points). A lower ratio typically indicates higher profitability.

UnitedHealthcare reported revenue of $73.9 billion for the second quarter, up from $70.2 billion a year ago, reflecting growth in the number of people served domestically.

Year to date, the number of consumers served domestically with the company's commercial offerings grew by 2.3 million to 29.6 million.

Optum reported $62.9 billion in revenue for the second quarter, up from $56.3 billion a year ago.

Guidance: UnitedHealth expects a 2024 net profit of $15.95-$16.40 per share to reflect the classification to held for sale of its remaining South America operations, and the estimated Change Healthcare cyberattack impacts versus the prior estimate of $17.60-$18.20.

Direct response costs are estimated at $1.30 to $1.35, an increase of $0.40 to $0.45 from the initial estimate due to the care provider financial support initiatives and consumer notification costs.

The company maintained an adjusted net earnings outlook of $27.50 to $28.00 per share versus a consensus of $27.59.

The outlook absorbs an estimated $0.60 to $0.70 per share of business disruption impacts for the affected Change Healthcare services, which has increased by $0.30 per share since the initial estimate.

Price Action: UNH shares are down 0.36% at $513.51 during the premarket session on the last check Tuesday.

Photo via Shutterstock

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