01—Abstract
Summary
Summary of the 10-Q filed July 17, 2024. Cited figures are marked; the original filing is the authoritative source.
Elevance Health, Inc. (ELV) reported its financial results for the second quarter and first half of 2024.
For the quarter ended June 30, 2024, total revenues grew slightly to $43.9 billiona from $43.7 billion in the prior year quarter. Shareholders' net income saw a significant increase of 24.1% to $2.3 billion, translating to diluted EPS of $9.85, up from $7.79 a year ago. This improvement was driven by better operating performance across all segments, a gain on the sale of its life and disability business, and increased net investment income, partially offset by higher income tax expense.
The first six months of 2024 also showed positive trends, with total revenues increasing to $86.5 billionb and shareholders' net income rising by 18.3% to $4.5 billion, resulting in diluted EPS of $19.44, up from $16.10 in the same period last year. The company highlighted strong growth in its CarelonRx and Carelon Services segments. However, total medical membership saw a decline of 4.6%, primarily due to Medicaid membership attrition following eligibility redeterminations, which the company expects to offset with growth in its commercial plans.
Elevance Health completed the acquisition of Paragon Healthcare, Inc. in March 2024, further bolstering its CarelonRx segment. The company also announced an agreement to acquire Centers Plan for Healthy Living LLC, expected to close in the third quarter of 2024.
The sale of its life and disability businesses in April 2024 contributed a $240 millionc gain. The company repurchased $1.03 billion of its common stock in the first half of 2024, demonstrating a commitment to returning capital to shareholders.
02—Key points
Key Highlights
- Shareholders' net income increased by 24.0% to $2.30 billion for the three months ended June 30, 2024, compared to $1.86 billion in the prior year period.
- Diluted Earnings Per Share (EPS) rose to $9.85 for the quarter, a 26.4% increase from $7.79 in the second quarter of 2023.
- Total operating revenue for the quarter was $43.22 billion, a slight decrease of 0.4% from $43.38 billion in the prior year quarter, impacted by Medicaid membership attrition.
- The company completed the acquisition of Paragon Healthcare, Inc. in March 2024, enhancing its CarelonRx segment.
- Elevance Health reported a $240 million gain on the sale of its life and disability businesses in April 2024.
- Total medical membership declined by 4.6% to 45.78 million members as of June 30, 2024, primarily due to Medicaid attrition.
- The company continued its share repurchase program, spending $1.03 billion on repurchases in the first half of 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Elevance Health, Inc. kept $0.05.
- Revenue$43.89B100.0%
- Cost of revenue−$4.82B11.0%
- Gross profit$39.07B89.0%
- Operating costs−$36.30B82.7%
- Operating income$2.77B6.3%
- Interest, other & tax−$464.0M1.1%
- Net income$2.30B5.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed July 17, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $43.89B$43.67B | +0.5% |
| Cost of Revenue | $4.82B$4.33B | +11.4% |
| Gross Profit | $39.07B$39.34B | −0.7% |
| SG&A Expenses | $5.07B$4.82B | +5.1% |
| Operating Income | $2.77B$2.63B | +5.2% |
| Interest Expense | $280.00M$261.00M | +7.3% |
| Net Income | $2.30B$1.86B | +24.0% |
| EPS (Basic) | $9.91$7.83 | +26.6% |
| EPS (Diluted) | $9.85$7.79 | +26.4% |
| Shares Outstanding (Basic) | 232.20M236.60M | −1.9% |
| Shares Outstanding (Diluted) | 233.40M237.80M | −1.9% |
05—Questions
Frequently Asked Questions
What was the primary driver for the increase in net income and EPS in the second quarter?
The increase in net income and EPS was primarily driven by improved operating gain performance across all reportable segments, a gain on the sale of the company's life and disability business, and higher net investment income. These positive factors were partially offset by higher income tax expense.
Why did total medical membership decline?
Total medical membership saw a decline of 4.6% primarily due to Medicaid membership attrition. This attrition is largely a result of eligibility redeterminations following the end of the public health emergency and certain market exits. The company anticipates this will be offset by growth in its commercial plans as former Medicaid members seek coverage elsewhere.
What is the significance of the acquisition of Paragon Healthcare, Inc.?
The acquisition of Paragon Healthcare, Inc., completed in March 2024, strengthens Elevance Health's CarelonRx segment. Paragon provides infusion services and injectable therapies, aligning with the company's strategy to offer comprehensive care management programs and enhance its specialty pharmacy capabilities.
How did the sale of the life and disability business impact the financial results?
The sale of the life and disability businesses in April 2024 resulted in a gain of $240 million, which positively contributed to the company's net income and overall financial results for the period.
06—Continue