Summary
Elevance Health, Inc. (formerly WellPoint, Inc.) reported its second-quarter and year-to-date results for 2009. The company saw a slight decrease in operating revenue, primarily due to declining membership in fully-insured plans, offset by premium rate increases. Net income decreased year-over-year for both the quarter and the six-month period, driven by lower operating revenue and increased administrative expenses, though partially mitigated by lower benefit expenses. Key financial developments include a significant increase in operating cash flow year-over-year, demonstrating strong operational cash generation. The company also announced its definitive agreement to sell its PBM (Pharmacy Benefit Management) business, NextRx, to Express Scripts, which is expected to provide substantial cash proceeds. Significant share repurchases continue to be a focus for capital allocation, reducing the outstanding share count. The company's financial position remains solid, with substantial cash and investments, though it faces ongoing challenges in the healthcare industry, including managing cost of care trends and navigating regulatory environments.
Financial Highlights
50 data points| Revenue | $15.41B |
| Cost of Revenue | $121.30M |
| Gross Profit | $15.29B |
| SG&A Expenses | $2.21B |
| Operating Income | $1.09B |
| Interest Expense | $117.00M |
| Net Income | $693.50M |
| EPS (Basic) | $1.44 |
| EPS (Diluted) | $1.43 |
| Shares Outstanding (Basic) | 482.50M |
| Shares Outstanding (Diluted) | 486.30M |
Key Highlights
- 1Total operating revenue for the quarter was $15.3 billion, a 1% decrease year-over-year, primarily due to membership declines in fully-insured plans, partially offset by premium rate increases.
- 2Net income for the quarter was $693.5 million, an 8% decrease compared to the same period in 2008, attributed to lower operating revenue and higher administrative expenses.
- 3The company announced an agreement to sell its PBM business (NextRx) to Express Scripts for $4.675 billion, expected to close in the second half of 2009.
- 4Operating cash flow for the six months ended June 30, 2009, was $1.6 billion, a significant increase from $1.2 billion in the prior year period.
- 5The company repurchased approximately 9.8 million shares of common stock in the second quarter of 2009 for $437.0 million.
- 6Medical membership decreased by 1,053,000 (3%) to 34.2 million as of June 30, 2009, primarily due to declines in Local Group and State-Sponsored businesses.
- 7The company reported a benefit expense ratio of 82.9% for the quarter, a decrease from 83.3% in the prior year, indicating improved cost management in certain segments.