UnitedHealth Group (NYSE: UNH) announced a stronger-than-anticipated second-quarter profit on Tuesday, driven by robust performance in its healthcare services division. It also revised cost estimates for a cyber-attack at the company’s technology division earlier in this year.
Andrew Witty, CEO of the company, highlighted its commitment to high-quality and affordable healthcare as a key driver.
The stock of the insurance company fell by nearly 3% on Tuesday, despite a positive report.
Investors expressed concern about the increased cost of cyber-attacks in the third quarter. UnitedHealth estimates that these cyberattacks impacted the earnings of the company by up to $2.05 a share.
UnitedHealth Group announced that the company has restored most of the affected Change Healthcare services.
In February, a cyber-attack affected the US unit that processes approximately half of all medical claims in the country, causing significant delays in payment to healthcare professionals and facilities.
Why did UnitedHealth’s stock fall on Tuesday?
UnitedHealth’s per-share earnings is expected to be between $27.50 & $28.00 this year, adjusted.
Comparatively, analysts were at $27.59 a share. Andrew Witty, the CEO of UNH stated in today’s press release:
The growth of UnitedHealth is diversified and durable, thanks to the commitment and dedication of our colleagues to providing high-quality and affordable healthcare to all. This positions us for both short and long terms.
Investors are not happy with the increased costs incurred by the company in its recently completed quarter.
UnitedHealth calculates that the attacks will have an impact on the company of 92 cents per share in the first quarter, and as much as $2.05 for the entire year.
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UnitedHealth earnings for Q2
- Earned $4.42 Billion versus $5.65 Billion the previous year
- Earnings per share declined from $5.82 down to $4.54
- According to the latest earnings report, adjusted EPS is $6.80.
- The revenue grew 6.5% to $98.9 Billion.
- The consensus was set at $6.67 per share for 98.7 Billion dollars in revenues
UnitedHealth also lost this morning because the medical care ratio of 85.1% has deteriorated by 190 basis point in the second quarter.
The company did, on the other hand, increase its dividend in June by 12%. Since 1995, the health services company has increased its dividend every year.
UNH Quarterly Release: What’s else noteworthy?
According to a press release issued on Tuesday, UnitedHealth plans to divest its remaining South American operations and has sold its Brazilian business.
It added that the impact of South American businesses was $1.28 per share during the second quarter.
UnitedHealth had $6.7 billion of cash from operations at the end of Q2, which is about 1.5 times net profit. Optum’s revenue increased by 12% to $62.9 Billion in today’s release of earnings.
Analysts at TD Cowen have reiterated the “buy” rating for UnitedHealth ahead of its quarterly results. UNH could rise to $546, which would suggest a 10% increase.
Investment firm is bullish, as company guidance for the full year remains positive and they have a track record of exceeding or maintaining their outlook.
The post UnitedHealth Q2 profits beat expectations amid recovery of tech unit hack could be updated as new information unfolds.
