On October 17, 2024, Elevance Health Inc (ELV, Financial) released its 8-K filing detailing its third-quarter 2024 financial results. Elevance Health, a leading U.S. health insurer, provides medical benefits to 47 million members and operates as the largest single provider of Blue Cross Blue Shield branded coverage in 14 states. The company also extends its reach through government-sponsored programs like Medicaid and Medicare Advantage.
Performance Overview
Elevance Health reported operating revenue of $44.7 billion for Q3 2024, surpassing analyst estimates of $43.33 billion. However, the adjusted diluted earnings per share (EPS) of $8.37 fell short of the estimated $9.22. The company declared a fourth-quarter dividend of $1.63 per share.
Financial Achievements and Challenges
The increase in operating revenue by $2.2 billion from the previous year was driven by higher premium yields and growth in CarelonRx product revenue. However, the company faced challenges with a benefit expense ratio of 89.5%, up by 270 basis points due to a timing mismatch between Medicaid rates and member acuity. This mismatch has impacted the company's profitability, as reflected in the lower EPS.
Segment Performance
In the Health Benefits segment, operating revenue rose to $38.3 billion, a $1.5 billion increase from the prior year, despite a 3% decrease in medical membership due to Medicaid attrition. The Carelon segment saw a 15% increase in operating revenue to $13.8 billion, driven by the launch of risk-based capabilities and growth in CarelonRx product revenue.
Cash Flow and Shareholder Returns
Operating cash flow for the quarter was $2.7 billion, marking a slight increase year-over-year. Elevance Health repurchased 0.1 million shares for $60 million and paid a quarterly dividend totaling $378 million. The company has $3.1 billion remaining in its share repurchase authorization, with an additional $8.0 billion increase approved for future repurchases.
Analysis and Outlook
Elevance Health's revenue growth highlights its strong market position and ability to navigate a challenging healthcare environment. However, the EPS shortfall underscores the impact of Medicaid-related challenges. The company's proactive measures to enhance operational efficiencies and its strategic focus on premium yield growth are crucial for future profitability.
“We remain confident in the long-term earnings potential of our diverse businesses as we navigate a dynamic operating environment and unprecedented challenges in the Medicaid business.” - Gail K. Boudreaux, President and CEO
For more detailed insights and financial data, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Elevance Health Inc for further details.
