01—Abstract
Summary
Summary of the 10-Q filed October 17, 2024. Cited figures are marked; the original filing is the authoritative source.
Elevance Health, Inc. reported a net income of $1,008 milliona for the third quarter of 2024, a decrease from $1,300 million in the same period last year.
Diluted earnings per share (EPS) were $4.36b, 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 millionc 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 milliond 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.
02—Key points
Key Highlights
- Q3 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.
- Diluted EPS for Q3 2024 was $4.36, a 20.0% decrease year-over-year, but nine-month EPS increased 10.4% to $23.81.
- Total 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.
- Medical claims payable decreased to $15,346 million from $16,111 million at the end of 2023.
- Total assets increased to $116,533 million from $108,928 million year-end 2023.
- The company recognized a $666 million accrual for the estimated Provider Settlement Agreement related to the BCBSA antitrust litigation.
- Elevance 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.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Elevance Health, Inc. kept $0.02.
- Revenue$45.11B100.0%
- Cost of revenue−$5.09B11.3%
- Gross profit$40.01B88.7%
- Operating costs−$38.60B85.6%
- Operating income$1.41B3.1%
- Interest, other & tax−$400.0M0.9%
- Net income$1.01B2.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 17, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $45.11B$42.85B | +5.3% |
| Cost of Revenue | $5.09B$4.65B | +9.6% |
| Gross Profit | $40.01B$38.20B | +4.7% |
| SG&A Expenses | $5.27B$5.47B | −3.7% |
| Operating Income | $1.41B$1.76B | −19.8% |
| Interest Expense | $300.00M$259.00M | +15.8% |
| Net Income | $1.01B$1.30B | −22.5% |
| EPS (Basic) | $4.38$5.48 | −20.1% |
| EPS (Diluted) | $4.36$5.45 | −20.0% |
| Shares Outstanding (Basic) | 231.90M235.30M | −1.4% |
| Shares Outstanding (Diluted) | 233.10M236.50M | −1.4% |
05—Questions
Frequently Asked Questions
What was the primary driver of the decrease in net income for the third quarter?
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.
How is the company managing the decline in Medicaid membership?
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.
What is the significance of the Provider Settlement Agreement accrual?
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.
What are the key acquisitions the company is pursuing?
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.
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