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UnitedHealth Group (NYSE: UNH) reported robust financial results for the second quarter of 2024, showcasing significant growth across its business segments.

The company’s revenues reached $98.9 billion, a substantial increase of nearly $6 billion compared to the same period last year. This growth was primarily driven by the expansion in the number of people served domestically by Optum and UnitedHealthcare. Optum, in particular, saw revenues of $62.9 billion, marking an increase of over $6 billion year-over-year, with notable contributions from Optum Rx and Optum Health.

UnitedHealth Group’s earnings from operations for the quarter stood at $7.9 billion, despite facing $1.1 billion in unfavorable impacts due to a cyberattack.

Adjusted earnings from operations, which exclude the direct response costs related to the cyberattack and the impacts from South American operations, were $8.7 billion. The company’s medical care ratio for the quarter was 85.1%, reflecting a 65 basis point impact from accommodations to support care providers and actions in South America.

Cash flows from operations were robust at $6.7 billion, 1.5 times the net income. UnitedHealth Group also increased its annual dividend rate by 12%, marking the 15th consecutive year of double-digit increases.

Despite the challenges posed by the cyberattack, the company maintained strong operating cost efficiency, with an operating cost ratio of 13.3% compared to 14.9% in the previous year.
 

UnitedHealth Group Beats EPS and Revenue Expectations in Q2

The second quarter results for UnitedHealth Group surpassed market expectations in several key areas. Analysts had projected earnings per share (EPS) of $6.67 and revenue of $98.72 billion.

The actual adjusted EPS came in at $6.80, exceeding expectations by $0.13. The reported revenue of $98.9 billion also slightly surpassed the forecasted figure by $0.18 billion, indicating the company’s strong performance and effective management amidst challenging circumstances.

When comparing the current quarter’s performance to the same period last year, UnitedHealth Group demonstrated significant growth. Revenues increased from $92.9 billion to $98.9 billion, and adjusted earnings per share rose from $6.14 to $6.80.

Despite the positive financial performance, the company faced notable challenges, including the cyberattack, which had a total impact of $0.92 per share in the second quarter.

This included $0.64 per share for direct response efforts and increased medical care expenditures, and $0.28 per share for business disruption impacts.
 

UnitedHealth Group Updates Full-Year 2024 Net Earnings Outlook to a Range of 15.95 to $16.40

UnitedHealth Group has updated its full-year 2024 net earnings outlook to a range of $15.95 to $16.40 per share. This revision reflects the classification of its remaining South American operations as held for sale and the estimated impacts of the Change Healthcare cyberattack.

The company completed the sale of its larger Brazilian operations in the first quarter of 2024 and plans to sell its remaining South American operations, which had a total impact of $1.28 per share in the second quarter.

Despite these adjustments, UnitedHealth Group has affirmed its adjusted net earnings outlook of $27.50 to $28.00 per share, as established at its November 2023 Investor Conference.

This consistent outlook absorbs an estimated $0.60 to $0.70 per share of business disruption impacts from the Change Healthcare cyberattack, which has increased by $0.30 per share since the initial estimate provided last quarter. The company continues to support care providers financially, having provided over $9 billion in advance funding and interest-free loans to date.

Looking ahead, UnitedHealth Group remains focused on delivering high-quality, affordable care and enhancing its service offerings. The company expects to see continued growth in its domestic commercial offerings and value-based care models through Optum Health.

Additionally, the expansion of its pharmacy services through Optum Rx and the deepening of clinical support for patients with complex medical needs are expected to drive further growth and strengthen its market position.
 

Total Impact of Cyberattacks for Q2 Estimated to be $0.92 per Share

UnitedHealth Group has made significant progress in addressing the impacts of the cyberattack on Change Healthcare. Most of the affected services have been restored, and the company continues to provide financial support to care providers in need.

The total cyberattack impacts for the second quarter were $0.92 per share, with direct response costs and business disruption impacts contributing to this figure. For the full year 2024, the company estimates the total impact at $1.90 to $2.05 per share, with direct response costs accounting for $1.30 to $1.35 per share.

In South America, UnitedHealth Group has completed the sale of its Brazilian operations and plans to sell its remaining South American operations.

The total impact from South American operations in the second quarter was $1.28 per share, primarily due to cumulative foreign currency losses. The company’s strategy to exit South America is aimed at streamlining its operations and focusing on its core markets.

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