Elevance Health's quarterly profit tops estimates to offset a revenue shortfall

By Ciara Linnane

Stock jumps 4.7% to put it on track for highest close since Dec. 12, 2022

Elevance Health Inc.'s stock rose 4.7% on Thursday, after the health insurer posted better-than-expected profit for the first quarter and raised a full-year guidance metric, offsetting a revenue shortfall.

The stock (ELV) was on track for its highest close since Dec. 12, 2022, and its biggest percentage increase since July 14, 2023, according to Dow Jones Market Data. It's now up for four straight days and has tacked on 7% over that period.

The Indianapolis-based company, which was called Anthem until mid-2022, had a net income of $2.246 billion, or $9.59 a share, for the quarter, up from $1.989 billion, or 8.30 a share, in the year-earlier period.

Excluding one-time items, per-share earnings came to $10.64, ahead of the $10.50 FactSet consensus.

Revenue rose 0.9% to $42.273 billion, below the $42.493 billion FactSet consensus.

The company raised its full-year adjusted EPS guidance and said it expects it to exceed the $37.20 it offered in January. The current FactSet consensus is for full-year EPS of $37.15.

Read also: Why the CMS' Medicare Advantage rate is hurting stocks of Humana, UnitedHealth

Earlier this week, Elevance said it has agreed to a partnership with private-equity firm Clayton, Dubilier & Rice for primary-care delivery. The agreement will bring together assets of Elevance's Carelon Health business and CDR portfolio companies Apree Health and Millennium Physician Group.

The companies are expecting the platform to serve nearly a million customer of their commercial, individual exchange, Medicaid, and Medicare health plans.

Carelon Health has 30 clinics that offer pharmacy, behavioral health, care delivery, medical benefits management and other services.

Elevance Chief Executive Gail K. Boudreaux said the deal is the next step in expanding access to patient-centered care in local markets.

By division, the health benefits division, comprising individual, employer group risk-based, employer group fee-based, BlueCard, Medicare, Medicaid, and Federal Health Products & Services businesses, saw operating revenue of $37.3 billion in the quarter, unchanged from a year ago.

Premium rate increases made to combat medical cost trends were offset by Medicaid membership attrition, the company said.

Medical membership totaled about 46.2 million at quarter-end, down 4% from the year-ago quarter, due to eligibility redeterminations and expected footprint adjustments.

The Carelon business, which comprises Carelon Services and CarelonRX pharmacy benefit management business, had operating revenue of $12.1 billion, up from $11.5 billion a year ago.

The numbers include a full quarter of revenue from BioPlus, a specialty pharmacy business that Elevance acquired last year.

The stock has gained 12.6% in the year to date, while the S&P 500 SPX has gained 5.7%.

-Ciara Linnane

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04-18-24 1241ET

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