Elevance Health Beat Street Estimates On Q2 Profit And Revenue, Sticks To Annual Guidance

Elevance Health Inc. ELV reported second-quarter revenues of $43.2 billion, down 0.4% year-over-year, marginally above the consensus of $43.05 billion. 

The decrease was driven by attrition in Medicaid membership, partially offset by higher premium yields reflecting the medical cost trend and growth in CarelonRx product revenue related to members served.

Related: Morgan Stanley Says Elevance Health’s Growth Attributed To Consistent Performance But Undervalued.

Premiums fell 3.2% to $35.42 billion, and product revenue rose 14% to $5.53 billion. Services fees increased 18% to $2.28 billion.

“Second quarter results reflect the power of our diversified business and thoughtful execution of our strategic initiatives during a dynamic time for our industry, as we remain steadfast in our purpose to improve the health of humanity. We have prudently maintained our full-year outlook and are confident in the earnings power of our Health Benefits and Carelon businesses, which underpin our long-term targets,” said Gail Boudreaux, President and CEO.

Profit rose 24% to $2.3 billion, or $9.85 a share. Per-share adjusted earnings reached $10.12, beating consensus of $10.01.

The benefit expense ratio was 86.3%, an improvement of 10 basis points, driven primarily by premium rate adjustments to cover medical cost trends in the Health Benefits business and disciplined commercial underwriting.

Medical membership totaled approximately 45.8 million, a decrease of 5% compared to the prior year quarter, driven by attrition in Medicaid business associated with eligibility redeterminations and footprint adjustments, primarily in the first quarter.

Medicaid enrollment dropped 23% to 9 million in the second quarter compared to 11.7 million a year ago.

These losses were partially offset by growth in Affordable Care Act health plans and commercial Employer Group fee-based membership.

Reuters notes that Unlike rivals UnitedHealth Group Inc UNH and Humana Inc HUM, Elevance is less exposed to government-backed Medicare Advantage plans for people aged 65 and older and banks more on commercial and Medicaid health plans.

Operating revenue at its Carelon division was $13.3 billion, up by 10% year-over-year.

Guidance: Elevance Health expects GAAP net income per diluted share of at least $34.05 in 2024 and reaffirms adjusted EPS guidance of at least $37.20 versus consensus Of $37.28.

Price Action: ELV shares are down 3.82% at $532.00 during the premarket session on the last check Wednesday.

Image: Shutterstock/ REDPIXEL.PL

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