10-QPeriod: Q3 FY2024

Elevance Health, Inc. Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 17, 2024For Securities:ELV

Summary

Elevance Health, Inc. reported a net income of $1,008 million for the third quarter of 2024, a decrease from $1,300 million in the same period last year. Diluted earnings per share (EPS) were $4.36, down from $5.45 year-over-year. For the nine-month period, net income increased to $5,558 million from $5,160 million in 2023, with EPS rising to $23.81 from $21.56. Total operating revenue for the third quarter increased by 5.3% to $44,719 million, driven by premium rate increases and growth in CarelonRx. However, this was partially offset by a decline in Medicaid membership due to eligibility redeterminations. The company also incurred a $666 million accrual for the anticipated Provider Settlement Agreement related to the BCBSA litigation, impacting operating gain. Total assets grew to $116,533 million from $108,928 million at the end of 2023, supported by increased investments and property and equipment. The company continues to return capital to shareholders through dividends and share repurchases, with $11,111 million available for future repurchases. Elevance Health announced two pending acquisitions expected to close in late 2024 or early 2025, aimed at expanding its long-term care and home and community-based services.

Financial Highlights

53 data points
Beta

Revenue

$45.11B

88.7% Gross Margin

Net Income

$1.01B

2.2% Net Margin

EPS (Diluted)

$4.36

Total Assets

$116.53B

Cash & Equivalents

$7.87B

Free Cash Flow

$2.35B

Financial Statements
Beta
Revenue$45.11B
Cost of Revenue$5.09B
Gross Profit$40.01B
SG&A Expenses$5.27B
Operating Income$1.41B
Interest Expense$300.00M
Net Income$1.01B
EPS (Basic)$4.38
EPS (Diluted)$4.36
Shares Outstanding (Basic)231.90M
Shares Outstanding (Diluted)233.10M

Key Highlights

  • 1Q3 2024 net income of $1,008 million, down 22.5% year-over-year, while nine-month net income increased 7.7% to $5,558 million.
  • 2Diluted EPS for Q3 2024 was $4.36, a 20.0% decrease year-over-year, but nine-month EPS increased 10.4% to $23.81.
  • 3Total operating revenue grew 5.3% in Q3 to $44,719 million, driven by premium rate increases and CarelonRx product revenue, but offset by Medicaid membership attrition.
  • 4Medical claims payable decreased to $15,346 million from $16,111 million at the end of 2023.
  • 5Total assets increased to $116,533 million from $108,928 million year-end 2023.
  • 6The company recognized a $666 million accrual for the estimated Provider Settlement Agreement related to the BCBSA antitrust litigation.
  • 7Elevance Health has two pending acquisitions expected to close in late 2024 or early 2025 to expand its long-term care and home and community-based services.

Frequently Asked Questions

The decrease in net income for the third quarter was primarily due to a net decrease in operating gain across the company's reportable segments and a $39 million reduction in the gain on sale of life and disability businesses due to contingent purchase price adjustments. Additionally, the company recognized a significant $666 million accrual for the estimated Provider Settlement Agreement related to the BCBSA litigation.

The decline in Medicaid membership, primarily due to eligibility redeterminations, is impacting premiums. Elevance Health is experiencing this attrition but expects growth in its commercial plans, including through the Public Exchanges, as former Medicaid members seek alternative coverage. The company is also focusing on premium rate increases across its business lines to recognize medical cost trends and offset some of this impact.

The company has accrued an estimated $666 million for the Provider Settlement Agreement related to the Blue Cross Blue Shield Antitrust Litigation. If approved by the court, this settlement will require monetary payments and include non-monetary terms. The accrual was recognized as an operating expense in the Corporate & Other segment during the third quarter of 2024.

Elevance Health has two significant pending acquisitions: Centers Plan for Healthy Living LLC and Centers for Specialty Care Group IPA, LLC ('Centers'), a managed long-term care plan in New York, expected to close in Q4 2024. Additionally, they are acquiring RSV QOZB LTSS, Inc. and affiliated entities (d/b/a CareBridge), a value-based healthcare company managing home and community-based services, expected to close in late 2024 or Q1 2025. These acquisitions are aimed at expanding their long-term care and home and community-based services capabilities.