Elevance Health stock tumbles 12% on Q3 earnings miss

NEW YORK - Elevance Health Inc. (NYSE:ELV) shares fell sharply on Wednesday by 12.8% after the health insurer reported third quarter earnings that missed analyst expectations, despite revenue topping estimates.

The company posted adjusted earnings per share of $8.37, falling well short of the $9.66 consensus forecast. Revenue came in at $44.7 billion, exceeding analyst projections of $43.46 billion.

The company cited challenges in its Medicaid business as a key factor impacting results. "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," said CEO Gail K. Boudreaux.

Elevance Health reported operating revenue of $44.7 billion in Q3, up 5.3% YoY. However, operating gain fell 19.8% to $1.4 billion, with the operating margin declining to 3.1% from 4.1% a year ago.

The benefit expense ratio increased 270 basis points to 89.5%, driven primarily by higher costs in the Medicaid segment. Days in claims payable decreased to 42.8 days from 48.6 days in the prior year period.

Given the Q3 results and ongoing Medicaid challenges, Elevance Health lowered its full-year 2024 adjusted EPS guidance to approximately $33.00, down from its previous outlook.

"We expect Medicaid rates will align with the needs of our members in time, and are taking proactive actions to enhance operational efficiencies that will ensure we emerge from this period even stronger," Boudreaux added.

The company repurchased 0.1 million shares in Q3 for $60 million. Elevance Health declared a Q4 dividend of $1.63 per share.

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Source: Investing.com