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Tuesday, UnitedHealth Group (NYSE:UNH) reported better-than-expected third-quarter 2024 results, but lowered the upper bound of its annual EPS outlook.
The company reported adjusted EPS of $7.15, up from $6.56 a year ago, beating the consensus of $7.00.
UnitedHealth’s revenue rose nearly $8.5 billion (+9.1% year over year) to $100.8 billion, beating the consensus of $99.28 billion. This was driven by an increase in the number of people served nationally at Optum and UnitedHealthcare.
Third-quarter operating profit was $8.7 billion, including $0.3 billion of unfavorable effects from cyberattacks. Adjusted operating income of $9.0 billion includes impacts from disruptions to Change Healthcare’s operations, excluding direct response costs to cyberattacks.
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UnitedHealth reported a medical cost ratio (MCR) of 85.2% for the third quarter, up from 82.3% last year. A lower ratio generally indicates higher profitability.
The previously mentioned reductions in CMS Medicare funding, medical reserve development effects, and corporate and membership mix contributed to this increase. The company did not record any favorable earnings impacting medical reserve development during the quarter.
UnitedHealthcare reported revenue of $74.9 billion, up from $69.9 billion a year ago, reflecting growth in the number of people served nationally.
Since the beginning of the year, the number of consumers served nationally through the company’s commercial offerings has increased by 2.4 million to 29.7 million.
Optum reported second-quarter revenue of $63.9 billion, up from $56.7 billion a year ago.
Advice: UnitedHealth expects 2024 net income of $15.50 to $15.75 per share, down from the previous range of $15.95 to $16.40, reflecting divestiture activity from Americas operations of the South reported in the first half of 2024 and the impacts of the Change Healthcare cyberattack.
The company’s adjusted EPS outlook of $27.50 to $27.75 versus consensus of $27.70 remains within the range of $27.50 to $28.00 established nearly a year ago year, although they absorb ~$0.75 per share of business disruption impacts for affected Change Healthcare services, which increased ~$0.10 per share from the estimate provided last quarter.
Previously, UnitedHealth forecast adjusted EPS between $27.50 and $28.00.
Price action: UNH stock is down 3.70% at $583.00 in pre-market trading at last check Tuesday.
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This article UnitedHealth Q3 Earnings: Revenue and EPS Beat, Revises Full-Year Earnings Guidance as Healthcare Cyber Attack Still Changes originally appeared on Benzinga.com
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