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Elevance Health (NYSE:ELV) stock on Wednesday rose as much 3.6% to $485.20, after the insurer raised its full year adjusted earnings per share guidance.
The bump to the forecast came in an earnings report that saw ELV making $8.99 per share on an adjusted basis for Q3, on revenue of $42.5B. Analysts had expected the managed care player to earn $8.46 per share on sales of $42.72B.
Based on its quarterly and YTD performance, ELV now sees full year 2023 adjusted earnings per share to be greater than $33, compared to a prior outlook of greater than $32.85. The consensus EPS estimate is $32.93.
Elevance (ELV) top boss Gail Boudreaux on the earnings conference call said the updated full year guidance included “incremental investments planned for the fourth quarter that will accelerate our strategy and enhance the performance of our Medicare Advantage business.”
The overall health insurance market in the U.S. has seen a hit due to the unwinding of COVID-19 pandemic-related relief measures. At the start of the pandemic, the government had made a requirement that Medicaid programs would have to keep people continuously enrolled through the end of the coronavirus public health emergency (PHE). That aid ended on March 31 earlier this year, resulting in millions of people losing their coverage.
ELV CEO Boudreaux on the earnings call said that the company stood by its earlier estimate of retaining about 40% to 45% of all Medicaid members who received coverage during the PHE.
“By the time the dust settles in the third quarter of 2024, we feel good about that estimate. It’s just going to be a little bumpier or rockier along the way because of the gaps in coverage and because of the administrative churn,” Boudreaux said.
During Q3, Elevance’s (ELV) medical membership decreased by 664K, driven by attrition in Medicaid. The insurer’s medical loss ratio – the percentage of claims paid to premiums collected – came in at 86.8%, an improvement of 40 basis points Y/Y.
ELV also took a net charge of $697M in Q3 tied to the write-off of certain IT assets and contract exit costs, a reduction in workforce, and the closure of data centers and offices.
Additionally, Elevance (ELV) announced a fourth consecutive quarterly dividend of $1.48/share.
