Elevance Health Lowers Profit Outlook Despite Strong Q1 Revenue Growth

Elevance Health adjusted its full-year profit forecast downward but maintained its expected adjusted earnings target after reporting strong first-quarter results. The insurer now anticipates earnings between $28.30 and $29 per share for the year, down from the prior estimate of $30.40 to $31.10. However, adjusted earnings, which exclude one-time items, remain projected at $34.15 to $34.85 per share.

In the first quarter, Elevance Health posted a net profit of $2.18 billion, or $9.61 per share, slightly below the previous year's $2.25 billion. Adjusted earnings surpassed analyst expectations, coming in at $11.97 per share versus the anticipated $11.41. Revenue increased 15% year-over-year to $48.8 billion, exceeding forecasts driven by higher premium yields, membership growth, and acquisition contributions.

The company's financial performance benefited from gains in its health benefits business, including CarelonRx revenues, as well as growth in Medicare Advantage and individual Affordable Care Act membership. Medical membership grew by nearly 100,000 members to 45.8 million, reflecting increases in Medicare Advantage and commercial risk-based members.

Despite overall growth, the benefit-expense ratio, reflecting medical costs as a share of premiums, rose 80 basis points to 86.4% due to increased Medicaid medical expenses. This indicates elevated cost pressures within the Medicaid segment that could impact future underwriting results. Elevance's balanced approach in managing revenue growth and medical cost trends will be a key focus for stakeholders.

Elevance Health's quarterly results and updated guidance highlight ongoing dynamics in the U.S. health insurance market, including membership shifts, reimbursement factors, and regulatory cost drivers. The company's ability to navigate these elements will influence its competitive positioning and financial outcomes going forward.