Elevance Health Inc (NYSE:ELV) stock fell 0.42% (As on January 24, 11:24:21 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY 24. Medical membership of Elevance Health was around 45.7 million as of Dec. 31, 2024, which slipped 2% year over year. The decrease was due to attrition in its Medicaid business, partially offset by growth in commercial fee-based and Affordable Care Act membership. Premiums increased 3.2% year over year to $36.2 billion but came lower than the consensus mark of $36.6 billion. Product revenues of $6.7 billion increased 24.5% year over year and came higher than the Zacks Consensus Estimate of $5.9 billion and our estimate of $5.6 billion. Net investment income declined 0.4% year over year to $527 million, which missed the consensus mark of $532.4 million. Total operating margin deteriorated 150 basis points (bps) year over year to 1.5%. Total expenses of $44.8 billion rose 7.7% year over year and were higher than our estimate of $42.8 billion. The year-over-year rise was due to higher benefit expenses, the cost of products sold, and interest expenses. The operating expense ratio improved 110 bps year over year to 10.7%. The benefit expense ratio of 92.4% deteriorated 320 bps year over year.

Moreover, Health Benefits’ operating revenues totaled $37.6 billion, which increased 3% year over year. The metric benefited from higher premium yields, partially offset by the membership decline in Medicaid. Carelon segment’s operating revenues amounted to $14.7 billion, which rose 19% year over year. The uptick was due to the introduction and expansion of risk-based medical benefits within Carelon Services and acquisitions.

ELV in the fourth quarter of FY 24 has reported the adjusted earnings per share of $3.84, beating the analysts’ estimates for the adjusted earnings per share of $3.80, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 6 percent to $44.99 billion in the fourth quarter of FY 24, beating the analysts’ estimates for revenue by 0.71%. Elevance Health exited the fourth quarter with cash and cash equivalents of $8.3 billion, which rose 27% from the 2023-end level. Total assets of $116.7 billion increased 7.1% from the figure at 2023-end.

Looking ahead, the company forecast 2025 adjusted EPS in the range of $34.15 to $34.85, compared to the $34.86 Wall Street consensus. Elevance Health expects high single to low double digit revenue growth for 2025.