Today, two major US companies associated with the medical-insurance (UnitedHealth) and medical (Johnson&Johnson) markets reported financial results for Q1 2024. Both companies reported higher-than-expected earnings, but it was UnitedHealth's (UNH.US) report that came as the bigger positive surprise, while Johnson&Johnson's (JNJ.US) results suggest lower demand in the MedTech sector. Both companies are listed members of the Dow Jones Industrial Average (DIJA) index.

UnitedHealth with a positive surprise

Despite the February 2024 cyber-attack, the company expects to achieve its previously set annual sales targets, to which the market reacted optimistically. Shares are gaining more than 4% in the pre-market. Revenues rose almost 9% from $91.9bn in Q1 2023 to $99.8bn in Q1 2024. Adjusted earnings per share came in at US$6.91 against US$6.61 forecasts.

  • The negative currency effect from the sale of the company's Brazil unit and the cyberattack weakened earnings per share by US$1.53 (US$0.74 due to the cyberattack and expected from US$1.15 - US$1.35 for the full year horizon). MCR was 84.3% compared to 83.8% expected on Wall Street, indicating a continuing problem with achieving full profitability.
  • Pharmaceutical services sales and consulting at the Optum unit (103m customers) were $61.1bn vs $54.1bn in Q1 .2023. Medical services sales offered at UnitedHealthCare were $75.3bn vs $70.5bn in Q1 .2023, the company indicated, driven by healthy private client growth (up 2m in Q1 .2024). The company expects adjusted earnings per share of US$27.5 to US$28 in 2024.

United Health (UNH.US) chart, D1 interval

 

Source: xStation5

Johnson&Johnson's adjusted EPS came in at US$2.71 against US$2.65, and sales of US$21.38bn came in marginally lower than the US$21.39bn forecast. Medical technology sales came in at US$7.82bn against US$7.94bn expectations, and the company's full-year sales estimates are now oscillating between US$88bn and US$88.4bn, indicating that the company expects a slight improvement in revenue, in future quarters. The company's shares are trading flat ahead of the US market open.

Johnson&Johnson (JNJ.US) chart, D1 interval

Source: xStation5