Elevance Health Inc ELV revealed a positive trend in its fourth-quarter 2023 financial results, boasting revenues of $42.45 billion, a substantial 7% Y/Y increase, surpassing the consensus of $42.09 billion.
The climb was fueled by heightened premium revenue in the Health Benefits segment and an upsurge in pharmacy product revenue in CarelonRx.
Despite a slight dip in profit, with Elevance Health reporting a $856 million income, down 1% Y/Y from the fourth quarter of 2022, adjusted EPS soared to $5.62, marking a 15.2% Y/Y uptick, narrowly missing the consensus of $5.64.
The benefit expense ratio showcased a noteworthy improvement, settling at 89.2% in the fourth quarter, a 50 basis point enhancement compared to the same period in 2022, and reached 87% for the entire year, a 60 basis point boost Y/Y.
An outcome of attrition, Elevance’s membership showed a decrease of 570,000, or 1%, to approximately 46.96 million as of December 31, 2023, in contrast to the previous year.
Medicaid enrollment experienced a considerable decline of more than 1 million, or 9%, settling at 10.5 million at the conclusion of the fourth quarter in comparison to 11.57 million in the fourth quarter of 2022.
Interestingly, the company attributes these membership losses to attrition in its Medicaid business associated with the resumption of eligibility redeterminations, as well as decreases in employer group risk-based business. However, these membership setbacks were alleviated by growth in BlueCard, Affordable Care Act health plans, and Medicare Advantage.
Indubitably, Q4 witnessed Elevance Health losing 364,000 members due to the Medicaid eligibility rulings, somewhat counterbalanced by growth in the commercial segment.
Meanwhile, Carelon accrued an operating revenue of $12.4 billion in Q4 and attained $48 billion for the full-year 2023.
Dividend: Elevance Health marked a noteworthy 10.1% increase in its quarterly dividend, now standing at $1.63 per share.
Guidance: Elevance Health’s foresight paints an optimistic picture, anticipating 2024 operating revenue to either remain constant or experience low-single-digit growth over 2023 sales of $170.2 billion, in comparison to the consensus of $173.92 billion.
The company also anticipates an adjusted EPS of greater than $37.10, exceeding the consensus of $37.05, and envisions 2024 year-end medical enrollment to range from 45.8 million to 46.6 million, down from 47 million in 2023.
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Price Action: ELV shares are up 2.53% at $484.13 on the last check Wednesday.
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