Executive Summary
UnitedHealth Group Incorporated (UNH) reported robust revenues of $98.8 billion for Q1 2024, driven by growth in both its core health plans and the Optum segment, despite the adverse impacts from the Change Healthcare cyberattack which impaired operations. Management reaffirmed their adjusted EPS guidance for the year, indicating strong resilience and capability to recover amidst challenges. Key operational efficiencies were highlighted, particularly the ability to grow commercial membership significantly, adding 2.1 million members across all segments.
The health-focused company remains well-positioned in a competitive market, with clear strategies outlined for adapting to ongoing funding reductions in the Medicare Advantage space. Despite incurring a net loss of $1.41 billion, attributed mainly to the impact of the cyber incident, UnitedHealth anticipates regaining equilibrium through strategic investments and customer-centric approaches, thereby reinforcing its role as a leader in the healthcare sector.
Key Performance Indicators
QoQ: -125.83% | YoY:-125.11%
QoQ: -125.93% | YoY:-125.46%
Key Insights
**1. Revenue Growth:** The company reported a revenue increase of 8.4% year-over-year and 5.9% quarter-over-quarter, totaling $98.78 billion.
**2. Net Income:** The net loss of $1.41 billion equated to an EPS of -$1.53, significantly lower than the previous year's profit, marking a -125.46% change YoY.
**3. EBITDA:** The quarterly EBITDA stood at $1.84 billion with a modest EBITDA margin of 1.85%.
**4. Operating Margin:** Operating income was $7.93 billion with an operating margin of 8.03%...
Financial Highlights
1. Revenue Growth: The company reported a revenue increase of 8.4% year-over-year and 5.9% quarter-over-quarter, totaling $98.78 billion.
2. Net Income: The net loss of $1.41 billion equated to an EPS of -$1.53, significantly lower than the previous year's profit, marking a -125.46% change YoY.
3. EBITDA: The quarterly EBITDA stood at $1.84 billion with a modest EBITDA margin of 1.85%.
4. Operating Margin: Operating income was $7.93 billion with an operating margin of 8.03%, slightly declining from previous margins due to operational disruptions.
5. Debt Metrics: With total liabilities of $187.29 billion against total equity of $86.69 billion, the debt-to-equity ratio sits at 0.85, indicating manageable leverage levels.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
98.79B |
8.40% |
5.94% |
| Gross Profit |
21.99B |
0.51% |
5.62% |
| Operating Income |
7.93B |
-1.92% |
3.15% |
| Net Income |
-1.41B |
-125.11% |
-125.83% |
| EPS |
-1.53 |
-125.46% |
-125.93% |
Key Financial Ratios
operatingProfitMargin
8.03%
operatingCashFlowPerShare
$1.24
freeCashFlowPerShare
$0.44
dividendPayoutRatio
-122.7%
priceEarningsRatio
-79.94
Management Commentary
Change Healthcare Cyberattack Response: CEO Andrew Witty emphasized the commitment to restoring services and mitigating impacts, stating, "...we quickly deployed resources to develop alternative solutions and restore claims and payment services."
Membership Growth: CFO John Rex noted, "At UnitedHealthcare, revenues of $75.4 billion grew nearly $5 billion...we served 2.1 million new consumers in the first quarter."
Future Outlook: Management is "...super focused on ensuring that year in, year out, we're a super reliable performer in this environment." indicating confidence in executing growth strategies despite challenges in funding environments.
"...we reconfirm our full year adjusted earnings outlook, even as we absorb $0.30 to $0.40 per share in business disruption impacts related to Change Healthcare." - Andrew Witty, CEO
â Andrew Witty, CEO
"We continue with robust opportunities in the marketplace in terms of other capabilities that we are looking at." - John Rex, CFO},
â John Rex, CFO
Forward Guidance
The management has maintained its adjusted EPS guidance for 2024, set between $27.50 to $28.00 per share, despite absorbing estimated business disruptions related to the Change Healthcare attack, which may impact earnings by approximately $0.30 to $0.40 per share for the year. Investors should monitor operational recovery related to service restorations and enrollment growth, particularly as Medicare Advantage dynamics evolve in response to regulatory changes.