On Thursday, Elevance Health Inc. (NYSE:ELV) reported fourth-quarter revenues of $44.99 billion, up 6% year-over-year, slightly higher than the consensus of $44.86 billion.
The increase was driven by higher premium yields in the Health Benefits segment, acquisitions completed in 2024, and growth in CarelonRx product revenue, partially offset by membership attrition in the Medicaid business.
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The benefit expense ratio was 92.4% in the fourth quarter, an increase of 320 basis points compared to the prior year period and 88.5% for the full year, an increase of 150 basis points year over year.
The increases were driven primarily by higher Medicaid medical cost trends.
The operating expense ratio was 10.7% in the fourth quarter and 11.4% for the full year. On an adjusted basis, the corresponding operating expense ratios were 9.9% and 10.6%. The improvements in the adjusted operating expense ratio over prior year periods of 170 basis points and 70 basis points, respectively, reflect disciplined cost management and enhanced efficiency.
“Our fourth quarter results demonstrate tangible progress in improving our operations in response to the dynamic environment facing the industry. As we look to 2025, we remain resolute in our goal to simplify the healthcare experience, deepen the impact of Carelon, and deploy innovative care models, positioning us to achieve sustainable growth over the long run,” said Gail Boudreaux, President and CEO.
Premiums rose 3.2% to $36.25 billion, product revenue rose 24.5% to $5.89 billion, and services fees increased 5.6% to $2.03 billion.
Adjusted earnings per share reached $3.84, down from $5.62 a year ago, beating the consensus of $3.81.
Health Benefits segment operating revenue was $37.6 billion in the fourth quarter of 2024, up 3%, driven primarily by higher premium yields, partially offset by membership attrition in our Medicaid business.
Medical membership totaled approximately 45.7 million as of Dec. 31, 2024, a decrease of 1.1 million, or 2%, driven by attrition in Medicaid business, partially offset by growth in Employer Group fee-based and Affordable Care Act health plan membership.
Operating revenue for Carelon was $14.7 billion, up 19%, driven by the launch and growth of risk-based capabilities in Carelon Services and acquisitions completed in 2024.
Dividend: The company declared a first quarter 2025 dividend to shareholders of $1.71 per share, up 5%. The first quarter dividend is payable on March 25, 2025, to shareholders of record at the close of business on March 10, 2025.
Guidance: Elevance Health expects 2025 adjusted EPS Of $34.15-$34.85 versus consensus of $34.58.
The company expects high single to low double-digit growth in operating revenue.
Price Action: ELV stock is up 4.4% at $408 during the premarket session on the last check Thursday.
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