Elevance Health : Q3 2024 Earnings Release
ELV
E A R N I N G S R E L E A S E
ELEVANCE HEALTH REPORTS THIRD QUARTER 2024 RESULTS
Indianapolis, IN - October 17, 2024 - Elevance Health, Inc. (NYSE: ELV) reported third quarter 2024 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. 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."
Gail K. Boudreaux
President and Chief Executive Officer
Given third quarter results and the timing mismatch between Medicaid rates and acuity, Elevance Health now expects 2024 GAAP net income per diluted share to be approximately $26.50 and adjusted net income per diluted share to be approximately $33.00.
1
Elevance Health
Consolidated Enterprise Highlights
(Unaudited)
(In billions)
Three Months Ended
September 30,
September 30,
June 30,
2024
2023
2024
Operating Revenue1
$44.7
$42.5
$43.2
Operating Gain1,2
$1.4
$1.8
$2.8
Adjusted Operating Gain1,3
$2.4
$2.5
$2.8
Operating Margin1
3.1 %
4.1 %
6.4 %
Adjusted Operating Margin1,3
5.3 %
6.0 %
6.6 %
Operating revenue was $44.7 billion in the third quarter of 2024, an increase of $2.2 billion compared to the prior year quarter. This was driven by higher premium yields in our Health Benefits segment and growth in CarelonRx product revenue, partially offset by membership attrition in our Medicaid business.
The benefit expense ratio was 89.5 percent, an increase of 270 basis points, driven primarily by the timing mismatch between Medicaid rates and the higher acuity of our members. Days in Claims Payable was 42.8 days as of September 30, 2024, a decrease of 2.5 days from June 30, 2024, and a decrease of 5.8 days compared to September 30, 2023 due to increases in average benefit expense per day.
The operating expense ratio was 11.8 percent, an improvement of 110 basis points. Excluding adjustment items, the operating expense ratio was 9.6 percent, an improvement of 150 basis points, reflecting disciplined cost management to enhance operating efficiency.
Cash Flow & Balance Sheet
Operating cash flow was $2.7 billion in the quarter, an increase of approximately $0.1 billion year-over- year. As of September 30, 2024, cash and investments at the parent company totaled approximately $2.6 billion.
During the third quarter of 2024, the Company repurchased 0.1 million shares of its common stock for $60 million, at a weighted average price of $511.01, and paid a quarterly dividend of $1.63 per share, representing a distribution of cash totaling $378 million. As of September 30, 2024, the Company had approximately $3.1 billion of Board approved share repurchase authorization remaining. On October 15, 2024, our Audit Committee, pursuant to authorization granted by the Board of Directors, authorized an $8.0 billion increase to the common stock repurchase program. The Company intends to utilize this authorization over a multi-year period, subject to market and industry conditions.
2
Health Benefits is comprised of Individual, Employer Group risk-based, Employer Group fee-based, BlueCard®, Medicare, Medicaid, and Federal Health Products & Services businesses.
Health Benefits
Reportable Segment Highlights
(Unaudited)
(In billions)
Three Months Ended
September 30,
September 30,
June 30,
2024
2023
2024
Operating Revenue1
$38.3
$36.7
$37.2
Operating Gain1
$1.6
$1.8
$2.1
Operating Margin1
4.2 %
5.0 %
5.8 %
1. See "Basis of Presentation" on page 5 herein.
Health Benefits segment operating revenue was $38.3 billion in the third quarter of 2024, an increase of $1.5 billion compared to the prior year quarter, driven primarily by higher premium yields, partially offset by membership attrition in our Medicaid business.
Operating gain totaled $1.6 billion, impacted primarily by the unfavorable mix shift in Medicaid membership related to eligibility redeterminations, partially offset by premium rate increases, focused medical management, and the proactive actions we are taking to enhance operating efficiency.
Medical membership totaled approximately 45.8 million as of September 30, 2024, a decrease of 1.5 million, or 3 percent, driven by attrition in our Medicaid business associated with eligibility redeterminations and footprint adjustments in certain Medicaid states. These losses were partially offset by growth in Employer Group fee-based and Affordable Care Act health plan membership.
3
Carelon is comprised of CarelonRx and Carelon Services.
Carelon
Reportable Segment Highlights
(Unaudited)
(In billions)
Three Months Ended
September 30,
September 30,
June 30,
2024
2023
2024
Operating Revenue1
$13.8
$12.0
$13.3
Operating Gain1
$0.8
$0.7
$0.7
Operating Margin1
5.8 %
5.6 %
5.3 %
1. See "Basis of Presentation" on page 5 herein.
Operating revenue for Carelon was $13.8 billion in the third quarter of 2024, an increase of $1.8 billion, or 15 percent compared to the prior year quarter. This was driven by the launch and growth of risk-based capabilities in Carelon Services and growth in CarelonRx product revenue, related to the acquisition of Paragon Healthcare in the first quarter and increases in external members served.
Operating gain for Carelon totaled $0.8 billion, an increase of $134 million, or 20 percent, primarily driven by growth in product revenue and a one-time favorable intra-year true up in CarelonRx, partially offset by results in our Carelon Health businesses.
4
Quarterly Dividend
On October 15, 2024, the Audit Committee of the Company's Board of Directors declared a fourth quarter 2024 dividend to shareholders of $1.63 per share. The fourth quarter dividend is payable on December 20, 2024, to shareholders of record at the close of business on December 5, 2024.
About Elevance Health
Elevance Health is a lifetime, trusted health partner whose purpose is to improve the health of humanity. The company supports consumers, families, and communities across the entire healthcare journey - connecting them to the care, support, and resources they need to lead better lives. Elevance Health's companies serve approximately 113 million consumers through a diverse portfolio of industry-leading medical, pharmacy, behavioral, clinical, and complex care solutions. For more information, please visit www.elevancehealth.com or follow us @ElevanceHealth on X and Elevance Health on LinkedIn.
Conference Call and Webcast
Management will host a conference call and webcast today at 8:30 a.m. Eastern Daylight Time ("EDT") to discuss the company's third quarter results and outlook. The conference call should be accessed at least 15 minutes prior to the start of the call with the following numbers:
888-947-9963
(Domestic)
866-510-4837
(Domestic Replay)
312-470-0178
(International)
203-369-1943
(International Replay)
The access code for today's conference call is 3972058. There is no access code for the replay. The replay will be available from 11:30 a.m. EDT today, until the end of the day on November 15, 2024. The call will also be available through a live webcast at www.elevancehealth.comunder the "Investors" link. A webcast replay will be available following the call.
Basis of Presentation
Elevance Health Contacts:
Investor Relations
Media
Stephen Tanal
Leslie Porras
5
Elevance Health
Earnings Release Financial Schedules and Supplementary Information
Quarter & Year-to-Date Ended September 30, 2024
6
Elevance Health
Membership and Other Metrics
(Unaudited)
Change from
Medical Membership (in thousands)
September 30,
September 30,
June 30,
September 30,
June 30,
2024
2023
2024
2023
2024
Individual
1,299
999
1,281
30.0
%
1.4
%
3,672
3,754
3,648
(2.2) %
0.7
%
4,971
4,753
4,929
4.6
%
0.9
%
BlueCard®1
6,677
6,737
6,692
(0.9) %
(0.2) %
20,589
20,166
20,542
2.1
%
0.2
%
27,266
26,903
27,234
1.3
%
0.1
%
Medicare Advantage
2,047
2,064
2,031
(0.8) %
0.8
%
Medicare Supplement
894
928
894
(3.7) %
- %
Total Medicare
2,941
2,992
2,925
(1.7) %
0.5
%
Medicaid
8,926
11,018
9,028
(19.0) %
(1.1) %
Federal Employees Health Benefits
1,656
1,640
1,660
1.0
%
(0.2) %
Total Medical Membership
45,760
47,306
45,776
(3.3)%
- %
Other Membership (in thousands)
Dental Members
7,021
6,775
7,008
3.6
%
0.2
%
Dental Administration Members
1,878
1,708
1,851
10.0
%
1.5
%
Vision Members
10,382
9,861
10,275
5.3
%
1.0
%
Medicare Part D Standalone Members
258
261
260
(1.1) %
(0.8) %
Other Metrics (in millions)
CarelonRx Quarterly Adjusted Scripts
80.2
77.3
78.2
3.8
%
2.6
%
Carelon Services Consumers Served
101.3
104.8
102.3
(3.3) %
(1.0) %
1. BlueCard® membership for the three months ended September 30, 2023, is restated to align to the Blue Cross Blue Shield Association reporting methodology. For the three months ended September 30, 2023, BlueCard® membership has been restated lower by 19.
7
Elevance Health
Consolidated Statements of Income
(Unaudited)
(In millions, except per share data)
Three Months Ended
Nine Months Ended
September 30
September 30
2024
2023
Change
2024
2023
Change
Revenues
Premiums
. . . . . . . . . . . . . . $ 36,809
$ 35,259
4.4%
$ 107,921
$ 107,716
0.2%
Product revenue
. . . . . . . . . . . . . . 5,887
5,177
13.7%
15,916
14,058
13.2%
Service fees
. . . . . . . . . . . . . . 2,023
2,044
(1.0)%
6,378
5,981
6.6%
Total operating revenue
. . . . . . . . . . . . . . 44,719
42,480
5.3%
130,215
127,755
1.9%
Net investment income
. . . . . . . . . . . . . . 551
493
11.8%
1,524
1,296
17.6%
Net losses on financial instruments
. . . . . . . . . . . . . . (125)
(124)
NM
(371)
(358)
NM
(Loss) gain on sale of business
. . . . . . . . . . . . . . (39)
-
NM
201
-
NM
Total revenues
. . . . . . . . . . . . . . 45,106
42,849
5.3%
131,569
128,693
2.2%
Expenses
Benefit expense
. . . . . . . . . . . . . . 32,949
30,606
7.7%
94,067
92,996
1.2%
Cost of products sold
. . . . . . . . . . . . . . 5,093
4,648
9.6%
13,738
12,456
10.3%
Operating expense
. . . . . . . . . . . . . . 5,269
5,470
(3.7)%
15,221
15,088
0.9%
Interest expense
. . . . . . . . . . . . . . 300
259
15.8%
845
771
9.6%
Amortization of other intangible assets
. . . . . . . . . . . . . . 122
212
(42.5)%
400
668
(40.1)%
Total expenses
. . . . . . . . . . . . . . 43,733
41,195
6.2%
124,271
121,979
1.9%
Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss (income) attributable to noncontrolling interests . . . . . . . . . . . . .
Shareholders' net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders' earnings per diluted share . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefit expense as a percentage of premiums . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expense as a percentage of total operating revenue . . . . . . . . . . . . .
Income before income tax expense as a percentage of total revenue . . . . . . . .
1,373
1,654
(17.0)%
7,298
6,714
8.7%
365
354
3.1%
1,740
1,554
12.0%
1,008
1,300
(22.5)%
5,558
5,160
7.7%
8
(11)
NM
4
(29)
NM
$
1,016
$
1,289
(21.2)%
$
5,562
$
5,131
8.4%
$
4.36
$
5.45
(20.0)%
$
23.81
$
21.56
10.4%
(1.4)%
(1.8)%
233.1
236.5
233.6
238.0
89.5 %
86.8 %
270 bp
87.2 %
86.3 %
90 bp
11.8 %
12.9 %
(110)bp
11.7 %
11.8 %
(10)bp
3.0 %
3.9 %
(90)bp
5.5 %
5.2 %
30 bp
"NM" = calculation not meaningful
8
Elevance Health
Condensed Consolidated Balance Sheet
September 30,
December 31,
(In millions)
2024
2023
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$7,866
$6,526
Fixed maturity and equity securities
30,067
29,843
Premium and other receivables
18,399
17,865
Other current assets
5,949
5,795
Assets held for sale
565
-
Total current assets
62,846
60,029
Long-terminvestments
10,287
6,983
Property and equipment, net
4,505
4,359
Goodwill and other intangible assets
36,292
35,590
Other noncurrent assets
2,603
1,967
Total assets
$116,533
$108,928
Liabilities and equity
Liabilities
Current liabilities:
Medical claims payable
$15,346
$16,111
Short-termborrowings
360
225
Current portion of long-termdebt
2,100
1,649
Other current liabilities
24,064
23,806
Liabilities held for sale
163
-
Total current liabilities
42,033
41,791
Long-termdebt, less current portion
24,688
23,246
Other noncurrent liabilities
5,933
4,486
Total liabilities
72,654
69,523
Total shareholders' equity
43,775
39,306
Noncontrolling interests
104
99
Total equity
43,879
39,405
Total liabilities and equity
$116,533
$108,928
9
Elevance Health
Condensed Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
(In millions)
September 30
2024
2023
Operating activities
Net income
$5,558
$5,160
Depreciation and amortization
995
1,321
Share-basedcompensation
220
217
Changes in operating assets and liabilities
(1,701)
3,821
Other non-cashitems
30
513
Net cash provided by operating activities
5,102
11,032
Investing activities
Purchases of investments, net of sales and maturities
(1,614)
(1,976)
Net purchases of subsidiaries, net of cash acquired/sold
(725)
(1,570)
Purchases of property and equipment
(934)
(970)
Other, net
(256)
(27)
Net cash used in investing activities
(3,529)
(4,543)
Financing activities
Net change in short-termand long-termborrowings
1,915
401
Repurchase and retirement of common stock
(1,089)
(1,748)
Cash dividends
(1,135)
(1,049)
Other, net
94
(559)
Net cash provided by (used in) financing activities
(215)
(2,955)
Effect of foreign exchange rates on cash and cash equivalents
2
(2)
Change in cash and cash equivalents
1,360
3,532
Cash and cash equivalents at beginning of period
6,526
7,387
Less cash and equivalents included in assets held for sale at end of period
(20)
-
Cash and cash equivalents at end of period
$7,866
$10,919
10
Disclaimer
Elevance Health Inc. published this content on October 16, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 17, 2024 at 10:14:15.571.