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Lifting health (New York Stock Exchange:ELV) actions on Wednesday rose up to 3.6% to $485.20, after the insurer raised its full-year adjusted earnings per share guidance.
The increase in forecast came on an earnings report that saw ELV earning $8.99 per share on an adjusted basis for the third quarter, on revenue of $42.5 billion. Analysts expected the managed care player to earn $8.46 per share on sales of $42.72 billion.
Based on its quarterly and year-to-date performance, ELV now forecasts full-year 2023 adjusted earnings per share to be above $33, compared to a previous outlook of above $32.85. The consensus estimate per share is $32.93.
Elevance (ELV) Chief Executive Officer Gail Boudreaux, on the earnings call, said the updated full-year guidance included “incremental investments planned for the fourth quarter that will accelerate our strategy and improve the performance of our Medicare Advantage business “.
The overall health insurance market in the US has been affected due to the removal of relief measures related to the COVID-19 pandemic. At the beginning of the pandemic, the government had required Medicaid programs to keep people continuously enrolled until the end of the coronavirus public health emergency. That help ended on March 31 earlier this year, causing millions of people to lose their coverage.
ELV CEO Boudreaux on the earnings call said the company maintained its previous estimate of retaining between 40% and 45% of all Medicaid members who received coverage during the PHE.
“When things settle down in the third quarter of 2024, we feel good about that estimate. It’s just going to be a little bumpier or more difficult down the road because of gaps in coverage and administrative turnover,” Boudreaux said. .
During the third quarter, Elevance Medical Membership (ELV) decreased by 664,000, driven by attrition in Medicaid. The insurer’s medical loss ratio (the percentage of claims paid over premiums collected) reached 86.8%, a year-over-year improvement of 40 basis points.
ELV also took a net charge of $697 million in the third quarter tied to the write-off of certain IT assets and contract exit costs, a workforce reduction and the closure of data centers and offices.
Additionally, Elevance (ELV) announced a fourth consecutive quarterly dividend of $1.48 per share.
