Shares of UnitedHealth Group, the largest health insurance company in the U.S., surged almost 6% during Tuesday morning trading following an investor update on the significant cyberattack it experienced earlier this year.
The company, in its second quarterly earnings report, announced the restoration of most services affected at its subsidiary, Change Healthcare, a medical record and payment manager.
UnitedHealth disclosed that the cyberattack’s impact in the second quarter was $0.92 per share, and it has provided over $9 billion in advance funding and interest-free loans to support impacted healthcare providers. This financial aid, along with costs to notify affected customers, has led the company to increase the estimated financial impact to between $1.90 and $2.05 per share for the entire year.
Despite this, UnitedHealth reaffirmed its adjusted net earnings outlook of $27.50 to $28.00 per share, expressing confidence in its ability to absorb the cyberattack costs. The company reported $98.9 billion in revenue for the quarter ending June 30, surpassing Wall Street’s $98.7 billion expectation, according to FactSet.
“During the quarter, we prioritized devoting resources to support care providers in the wake of the cyberattack over some activities such as share repurchase,” said UnitedHealth President and Chief Financial Officer John Franklin Rex in a call with investors. “It was the right thing to do, devoting all of our efforts to provide stability for the health system.”
In February, the ransomware group ALPHV breached Change Healthcare, causing delays in prescriptions and paychecks for healthcare workers. UnitedHealth had previously reported that files containing protected health information and personally identifiable information were compromised, potentially affecting a significant portion of the American population.
For the three months ending June 30, UnitedHealth’s net income fell 22% to $4.2 billion, down from $5.5 billion in the same period the previous year. However, revenue increased by 6% year-over-year to $98.9 billion from $93 billion. The company also exceeded Wall Street expectations with earnings per share of $6.80, compared to the anticipated $6.66, based on FactSet’s consensus estimate from analysts.