01—Abstract
Summary
Summary of the 10-Q filed April 18, 2024. Cited figures are marked; the original filing is the authoritative source.
Elevance Health, Inc. reported solid financial results for the first quarter of 2024, demonstrating resilience and strategic execution in a dynamic healthcare landscape.
Total revenues saw a modest increase of 1.0% to $42.6 billiona, driven by premium rate adjustments and growth in its CarelonRx segment. Net income rose by a significant 12.2% to $2.25 billion, leading to a diluted Earnings Per Share (EPS) of $9.59, a 15.5% increase year-over-year. This performance was supported by improved operating gains across its Health Benefits, Carelon Services, and CarelonRx segments, coupled with a decrease in amortization of intangible assets and higher net investment income.
Operationally, the company experienced a 3.9%b decline in total medical membership, largely due to Medicaid redetermination effects and some attrition in employer group and Medicare segments. However, this was partially offset by growth in Individual, Employer Group fee-based, BlueCard, and FEHB memberships.
Strategic acquisitions, such as Paragon Healthcare, Inc., and pending acquisitions like Centers Plan for Healthy Living LLC, underscore Elevance Health's commitment to expanding its care delivery capabilities and market reach. The company also announced the divestiture of its life and disability businesses, signaling a sharpened focus on its core health insurance and healthcare services operations.
02—Key points
Key Highlights
- Total revenues increased by 1.0% to $42.58 billion for the three months ended March 31, 2024.
- Net income grew by 12.2% to $2.25 billion for the three months ended March 31, 2024.
- Diluted EPS increased by 15.5% to $9.59 for the three months ended March 31, 2024.
- Total medical membership decreased by 3.9% to 46.2 million, primarily due to Medicaid attrition.
- The company completed the acquisition of Paragon Healthcare, Inc. on March 11, 2024.
- Elevance Health divested its life and disability businesses effective April 1, 2024.
- The company's debt-to-capital ratio remained strong at 39.4% as of March 31, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, Elevance Health, Inc. kept $0.05.
- Revenue$42.58B100.0%
- Cost of revenue−$3.83B9.0%
- Gross profit$38.75B91.0%
- Operating costs−$35.74B83.9%
- Operating income$3.02B7.1%
- Interest, other & tax−$767.0M1.8%
- Net income$2.25B5.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 18, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $42.58B$42.17B | +1.0% |
| Cost of Revenue | $3.83B$3.48B | +9.9% |
| Gross Profit | $38.75B$38.69B | +0.2% |
| SG&A Expenses | $4.89B$4.80B | +1.8% |
| Operating Income | $3.02B$2.83B | +6.5% |
| Interest Expense | $265.00M$251.00M | +5.6% |
| Net Income | $2.25B$2.00B | +12.2% |
| EPS (Basic) | $9.65$8.37 | +15.3% |
| EPS (Diluted) | $9.59$8.30 | +15.5% |
| Shares Outstanding (Basic) | 232.70M237.50M | −2.0% |
| Shares Outstanding (Diluted) | 234.20M239.70M | −2.3% |
05—Questions
Frequently Asked Questions
What drove the increase in Elevance Health's net income in Q1 2024?
The increase in net income was primarily driven by improved operating gain performance in its Health Benefits, Carelon Services, and CarelonRx businesses. Additionally, lower amortization of other intangible assets and increased net investment income contributed to the rise. Higher income before taxes also played a role, which was partially offset by increased income tax expense.
Why did Elevance Health's total medical membership decline in the first quarter?
The decline in total medical membership was primarily attributed to Medicaid membership attrition, stemming from eligibility redeterminations and certain market exits. Lapses in the Employer Group risk-based and Medicare segments also contributed to the decrease. These were partially offset by gains in other business lines like Employer Group fee-based, Individual, BlueCard, and FEHB.
What are the key strategic initiatives or significant events for Elevance Health during this quarter?
Key strategic events include the completion of the Paragon Healthcare, Inc. acquisition, which expands its infusion services and injectable therapies capabilities. The company also completed the sale of its life and disability businesses, sharpening its focus. Looking ahead, pending acquisitions of Centers Plan for Healthy Living LLC and a strategic partnership with Clayton, Dubilier & Rice (CD&R) in a new entity are notable.
How is Elevance Health managing its investment portfolio in the current market environment?
Elevance Health classifies its fixed maturity securities as available-for-sale and reports them at fair value. While the company experienced unrealized losses on some securities, primarily due to rising interest rates, it has not recognized these as impairments as it does not intend to sell these investments and does not expect to be required to sell them before recovery. The company also actively manages its investment income and has seen an increase in net investment income this quarter.
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