UnitedHealth's Q1 Financials Shrug Off Change Breach Debacle

The mega-payer reports a $1.41 billion loss in the first quarter, but still surpasses analysts' expectations.

UnitedHealth Group says the Feb. 21 cyberattack on its Change Healthcare unit that continues to disrupt wide swaths of the healthcare sector could cost its shareholders about $1.5 billion this year.

The breach cost UnitedHealth about $872 million in Q1, as the payer on Tuesday reported a $1.41 billion loss for the quarter.

Otherwise, UnitedHealth’s Q1 financials were better than expected, with $99.8 billion in revenues booked, nearly $8 billion more year over year, stoked by strong enrollment growth at Optum and UnitedHealthcare.

As a result, the company's adjusted earnings of $6.91 per share exceeded analysts' estimates of $6.59 a share. Shares were up more than 3% in Wednesday morning trading.

"The core story at UnitedHealth Group remains our colleagues delivering improved experiences for the people we serve and driving balanced growth even while swiftly and effectively addressing the attack on Change Healthcare," UnitedHealth Group CEO Andrew Witty CEO says.

Witty says Change is making "significant progress" restoring billing and collection services and has doled out $6 billion in advance funding and interest-free loans for providers.

The cyberattacks dinged UnitedHealth investors for $0.74 per share in Q1, including $0.49 cents to support direct response efforts, and $0.25 in business disruptions. UnitedHealth says the full year 2024 effects could reach $1.15 to $1.35 per share.

The biggest drag on Q1 financials for UnitedHealth was a $7 billion charge for selling a Brazilian health benefits and care provider it bought more than a decade ago.

First quarter earnings from operations were $7.9 billion, including the $872 million in Change losses. Adjusted earnings from operations were $8.5 billion and include the Change business disruptions but exclude the cyberattack direct response costs.