UnitedHealth beats on revenue despite impact from cyberattack

Published

1 year ago

April 16, 2024

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UnitedHealth Group reported better-than-expected revenue in its first-quarter results on Tuesday, though the company is still dealing with the fallout from the cyberattack on its subsidiary Change Healthcare.

Here’s how the company did:

Earnings: $7.16 per share adjusted, vs. $6.61 expected by analysts, according to LSEG.
Revenue: $100.08 billion adjusted, vs. $99.26 billion expected by LSEG.

UnitedHealth reported revenue of $99.80 billion, up from $91.9 billion in the same period last year. The adjusted $100.08 billion revenue figure excludes the impact from the cyberattack.

The company said it incurred a charge of around $7 billion during the quarter from selling its Brazil operations, according to a release Tuesday. The currency effects from the Brazil sale as well as adverse impacts from the cyberattack contributed to a net loss during the period, UnitedHealth said. The company reported it had a net loss of $1.41 billion, or $1.53 per share, compared with net income of $5.61 billion, or $5.95, a share, a year earlier.

UnitedHealth reported adjusted earnings of $6.91 per share for the quarter. The company said the adjusted figure excludes the Brazil sale, but only part of the impact from the cyberattack. It broke down the effects from the cyberattack into two categories: “direct response” and “business disruption” costs.

Direct response efforts, like UnitedHealth’s effort to restore Change Healthcare platforms, amounted to an impact of 49 cents per share in the quarter. Business disruption costs, like lost Change Healthcare revenue, amounted to 25 cents per share. UnitedHealth said its adjusted earnings figure included the business disruption impacts, but excluded the direct response costs. The $7.16 adjusted EPS figure excludes the entire impact from the cyberattack.

The company said the total impact from the cyberattack in the first quarter was 74 cents per share, and it expects the full-year impact to be between $1.15 and $1.35 per share.

UnitedHealth reported a medical cost ratio, which is the amount of every premium dollar that goes toward medical costs, of 84.3% for the first quarter. That included 40 basis points of impact from the cyberattack, the company said. Analysts were expecting an MCR of 83.8%, according to StreetAccount. A lower ratio typically indicates higher profitability.

Shares of UnitedHealth rose more than 5% Tuesday morning. As of Monday’s close, the stock was down around 15% for the year.

UnitedHealth is made up of two major business units: Optum and UnitedHealthcare. Optum offers a range of pharmacy services, consulting services and provides medical care for around 103 million consumers, according to the company’s website.

Optum reported $61.1 billion in revenue for the first quarter, up from $54.1 billion in the same period last year. UnitedHealth said Optum’s revenue growth was led by its patient care and pharmacy arms due to “strong expansion” in the number of people served.

In 2022, Optum completed a $13 billion merger with Change Healthcare, which offers tools for payment and revenue cycle management. Change Healthcare processes more than 15 billion billing transactions annually, and one in every three patient records passes through its systems, according to the company.

UnitedHealth disclosed in February that a cyberthreat actor breached part of Change Healthcare’s information technology network, prompting the company to immediately disconnect the affected systems. The fallout has been far reaching across the health-care sector, as many doctors were left without a way to fill prescriptions or get paid for their services.

The company has been working to bring systems back online in recent weeks, and UnitedHealth said Tuesday that it has advanced more than $6 billion to health-care providers in need of assistance.

UnitedHealth said it continues to make “significant progress” in restoring Change Healthcare’s services.

“I’m immensely grateful for our colleagues who continue to work tirelessly — day and night — to restore services, free up funds for providers and protect the broader health system.,” UnitedHealth CEO Andrew Witty said during the company’s quarterly call with investors.

UnitedHealth’s other business unit, UnitedHealthcare, provides insurance coverage and benefit services to millions of Americans, according to its website. UnitedHealthcare reported revenue of $75.4 billion for the first quarter, up from $70.5 billion a year ago.

The company said the growth was driven by an increase in the number of people that UnitedHealthcare serves in the U.S. The unit’s total number of domestic consumers served grew by 2 million during the first quarter.

UnitedHealth said it updated its full-year net earnings outlook and expects to report between $17.60 and $18.20 per share, largely due to the cyberattack and the Brazil sale.

During the company’s earnings call, UnitedHealth CFO John Rex said UnitedHealthcare is “pretty much back to normal in terms of claim submission activity” in the wake of the cyberattack. He said claims are flowing as expected.

In late February, the U.S. Department of Justice reportedly launched an antitrust investigation into UnitedHealth, according to a report from the Wall Street Journal. The company declined to comment on the matter during its investor call.

Technology

Trump aims to cut $6 billion from NASA budget, shifting $1 billion to Mars-focused missions

Published

2 days ago

May 2, 2025

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Trump aims to cut billion from NASA budget, shifting billion to Mars-focused missions

The Trump administration has floated a plan to trim about $6 billion from the budget of NASA, while allocating $1 billion of remaining funds to Mars-focused initiatives, aligning with an ambition long held by Elon Musk and his rocket maker SpaceX.

A copy of the discretionary budget posted to the NASA website on Friday said that the change focuses NASA’s funding on “beating China back to the Moon and on putting the first human on Mars.”

NASA also said it will need to “streamline” its workforce, information technology services, NASA Center operations, facility maintenance, and construction and environmental compliance activities, and terminate multiple “unaffordable” missions, while reducing scientific missions for the sake of “fiscal responsibility.”

Janet Petro, NASA’s acting administrator, said in an agency-wide email on Friday that the proposed lean budget, which would cut about 25% of the space agency’s funding, “reflects the administration’s support for our mission and sets the stage for our next great achievements.”

Petro urged NASA employees to “persevere, stay resilient, and lean into the discipline it takes to do things that have never been done before — especially in a constrained environment,” according to the memo, which was obtained by CNBC. She acknowledged the budget would “require tough choices,” and that some of NASA’s “activities will wind down.”

The document on NASA’s website said it’s allocating more than $7 billion for moon exploration and “introducing $1 billion in new investments for Mars-focused programs.”

SpaceX, which is already among the largest NASA and Department of Defense contractors, has long sought to launch a manned mission to Mars. The company says on its website that its massive Starship rocket is designed to “carry both crew and cargo to Earth orbit, the Moon, Mars and beyond.”

Musk, who is the founder and CEO of SpaceX, has a central role in President Donald Trump’s administration, leading an effort to slash the size, spending and capacity of the federal government, and influencing regulatory changes through the Department of Government Efficiency (DOGE).

Musk, who frequently makes aggressive and incorrect projections for his companies, said in 2020 that he was “highly confident” that SpaceX would land humans on Mars by 2026.

Petro highlighted in her memo that under the discretionary budget, NASA would retire the SLS (Space Launch System) rocket, the Orion spacecraft and Gateway programs.

It would also put an end to its green aviation spending and to its Mars Sample Return (MSR) Program, which sought to use rockets and robotic systems to “collect and send samples of Martian rocks, soils and atmosphere back to Earth for detailed chemical and physical analysis,” according to a website for NASA’s Jet Propulsion Laboratory.

Some of the biggest reductions at NASA, should the budget get approved, would hit the space agency’s space science, Earth science and mission support divisions.

Petro didn’t name any specific aerospace and defense contractors in her agency-wide email. However SpaceX, ULA and Jeff Bezos’ Blue Origin are positioned to continue to conduct launches in the absence of the SLS. Boeing is currently the prime contractor leading the SLS program.

“This is far from the first time NASA has been asked to adapt, and your ability to deliver, even under pressure, is what sets NASA apart,” she wrote.

President Trump’s nominee to lead NASA, tech entrepreneur Jared Isaacman, still has to be approved by the U.S. Senate. His nomination was advanced out of the Senate Commerce Committee on Wednesday.

WATCH: CNBC’s interview with NASA’s astronauts on their nine months in space

Technology

Temu halts shipping direct from China as de minimis tariff loophole is cut off

Published

2 days ago

May 2, 2025

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Temu halts shipping direct from China as de minimis tariff loophole is cut off

Nurphoto | Nurphoto | Getty Images

Chinese bargain retailer Temu changed its business model in the U.S. as the Trump administration’s new rules on low-value shipments took effect Friday.

In recent days, Temu has abruptly shifted its website and app to only display listings for products shipped from U.S.-based warehouses. Items shipped directly from China, which previously blanketed the site, are now labeled as out of stock.

Temu made a name for itself in the U.S. as a destination for ultra-discounted items shipped direct from China, such as $5 sneakers and $1.50 garlic presses. It’s been able to keep prices low because of the so-called de minimis rule, which has allowed items worth $800 or less to enter the country duty-free since 2016.

The loophole expired Friday at 12:01 a.m. EDT as a result of an executive order signed by President Donald Trump in April. Trump briefly suspended the de minimis rule in February before reinstating the provision days later as customs officials struggled to process and collect tariffs on a mountain of low-value packages.

Jeff Bezos discloses plan to sell up to $4.8 billion in Amazon stock

Published

3 days ago

May 2, 2025

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Jeff Bezos discloses plan to sell up to .8 billion in Amazon stock

Jeff Bezos, founder and executive chairman of Amazon and owner of The Washington Post, takes the stage during The New York Times’ annual DealBook Summit, at Jazz at Lincoln Center in New York City, Dec. 4, 2024.

Michael M. Santiago | Getty Images

Amazon founder Jeff Bezos plans to sell up to 25 million shares in the company over the next year, according to a financial filing on Friday.

Bezos, who stepped down as CEO in 2021 but remains Amazon’s top shareholder, is selling the shares as part of a trading plan adopted on March 4, the filing states. The stake would be worth about $4.8 billion at the current price.

The disclosure follows Amazon’s first-quarter earnings report late Thursday. While profit and revenue topped estimates, the company’s forecast for operating income in the current quarter came in below Wall Street’s expectations.

The results show that Amazon is bracing for uncertainty related to President Donald Trump’s sweeping new tariffs. The company landed in the crosshairs of the White House this week over a report that Amazon planned to show shoppers the cost of the tariffs. Trump personally called Bezos to complain, and Amazon clarified that no such change was coming.

Bezos previously offloaded about $13.5 billion worth of Amazon shares last year, marking his first sale of company stock since 2021.

Since handing over the Amazon CEO role to Andy Jassy, Bezos has spent more of his time on his space exploration company, Blue Origin, and his $10 billion climate and biodiversity fund. He’s used Amazon share sales to help fund Blue Origin, as well as the Day One Fund, which he launched in September 2018 to provide education in low-income communities and combat homelessness.

WATCH: Amazon has levers to pull with tariffs