Why Is UNH Stock Soaring After Earnings?

UnitedHealth Group (UNH) stock is soaring over 5% in Tuesday's session after the company beat both earnings and revenue estimates for its fiscal 2024 first quarter.

UNH stock can certainly use the boost considering it was down 15% for the year-to-date heading into today's trading. This makes it one of the worst Dow Jones stocks of 2024 so far.

The company reported revenue of $99.8 billion and adjusted earnings of $6.91 per share for the three months ended March 31, which exceeded analysts' estimates of $99.3 billion and $6.61 per share, respectively. On a year-over-year basis, UnitedHealth's revenue increased 8.6% and its adjusted earnings per share (EPS) were up 10.4%.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

Also in the quarter, UnitedHealth's medical care ratio (MCR) expanded 210 basis points to 84.3% from 82.2% in the year-ago period, which it said was due to "revenue effects of the Medicare funding reductions, considerations driven by the Change Healthcare cyberattack, including accommodations to support care providers, medical reserve and development effects, and business mix."

The MCR measures medical costs as a percentage of premium revenue, and the lower the figure, the better.

UnitedHealth's adjusted EPS does not include a $683 million impact or approximately 74 cents per share, net of tax, incurred from a cyberattack at its Change Healthcare unit. For the full year, the company expects the impact to be between $1.15 per share and $1.35 per share.

"The core story at UnitedHealth Group remains our colleagues delivering improved experiences for the people we serve and driving balanced growth even while swiftly and effectively addressing the attack on Change Healthcare," UnitedHealth CEO Andrew Witty said in a statement.

As a result of its strong performance in the first quarter, UnitedHealth maintained its full-year adjusted EPS outlook of $27.50 to $28.00.

Earnings season is just getting started

The earnings calendar is heating up as the season gets rolling. After the market closes today, we'll get earnings reports from United Airlines (UAL), J.B. Hunt Transport (JBHT) and Interactive Brokers (IBKR), amongst others.

And before the market opens tomorrow, we'll get reports from ASML (ASML), Travelers Companies (TRV), Abbott Laboratories (ABT) and Prologis (PLD), amongst others.

Related Content

• Best Blue Chip Stocks: 21 Hedge Fund Top Picks
• How to Find the Best Healthcare Stocks to Buy
• What Are the Dogs of the Dow for 2024?