On January 23, 2025, Elevance Health Inc (ELV, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full year 2024. Elevance Health, a leading U.S. health insurer, provides medical benefits to 47 million members and operates as the largest single provider of Blue Cross Blue Shield branded coverage in 14 states.

Performance Overview

Elevance Health reported a fourth-quarter operating revenue of $45.0 billion, surpassing the analyst estimate of $44,862.61 million. However, the diluted EPS for the quarter was $1.81, significantly below the estimated $3.17. The adjusted diluted EPS was $3.84, which exceeded expectations. For the full year 2024, the company reported an operating revenue of $175.2 billion, aligning closely with the annual estimate of $175,300.94 million. The full-year diluted EPS was $25.68, while the adjusted diluted EPS was $33.04, surpassing the annual estimate of $27.08.

Financial Achievements and Challenges

The increase in revenue was driven by higher premium yields in the Health Benefits segment, acquisitions, and growth in CarelonRx product revenue. However, the company faced challenges with membership attrition in its Medicaid business, impacting overall performance. The benefit expense ratio increased to 92.4% in Q4, up by 320 basis points from the previous year, primarily due to higher Medicaid medical cost trends.

Segment Performance

In the Health Benefits segment, operating revenue increased by 3% to $37.6 billion in Q4 2024. However, the operating gain decreased to $0.2 billion from $0.8 billion in the prior year. The Carelon segment saw a 19% increase in operating revenue to $14.7 billion, driven by the launch and growth of risk-based capabilities and acquisitions. The adjusted operating gain for Carelon increased by 32% to $0.8 billion in Q4 2024.

Cash Flow and Shareholder Returns

Operating cash flow for 2024 was $5.8 billion, approximately 1.0 times the GAAP net income. The company repurchased 4.5 million shares for $1.8 billion and increased its quarterly dividend by 5% to $1.71 per share. As of December 31, 2024, Elevance Health had $9.3 billion of Board-approved share repurchase authorization remaining.

Analysis and Outlook

Elevance Health's financial performance reflects its strategic focus on expanding its product offerings and managing costs effectively. The increase in operating revenue and adjusted EPS highlights the company's ability to navigate a challenging healthcare environment. However, the decline in operating gain and increased benefit expense ratio indicate areas that require attention, particularly in managing Medicaid costs and membership retention.

“As part of our commitment to elevating whole health and advancing health beyond healthcare, we deliver value to the members and care providers we serve by ensuring simple, affordable, and accessible care. Our fourth quarter results demonstrate tangible progress in improving our operations in response to the dynamic environment facing the industry.” - Gail K. Boudreaux, President and CEO

Elevance Health's outlook for 2025 includes a projected GAAP diluted EPS range of $30.40 to $31.10 and an adjusted diluted EPS range of $34.15 to $34.85, indicating confidence in achieving sustainable growth through innovative care models and operational improvements.

Explore the complete 8-K earnings release (here) from Elevance Health Inc for further details.