Elevance Health Inc (NYSE:ELV) stock fell 3.62% (As on October 18, 11:33:50 AM UTC-4, Source: Google Finance) after the company reported third quarter earnings that missed analyst expectations, despite revenue topping estimates. The operating gain fell 19.8% to $1.4 billion, with the operating margin declining to 3.1% from 4.1% a year ago. The benefit expense ratio increased 270 basis points to 89.5%, driven primarily by higher costs in the Medicaid segment. Days in claims payable decreased to 42.8 days from 48.6 days in the prior year period. Operating cash flow was $2.7 billion in the quarter, an increase of approximately $0.1 billion year-over-year. As of September 30, 2024, cash and investments at the parent company totaled approximately $2.6 billion.
Moreover, Health Benefits segment operating revenue was $38.3 billion in the third quarter of 2024, an increase of $1.5 billion compared to the prior year quarter, driven primarily by higher premium yields, partially offset by membership attrition in the Medicaid business. Medical membership totaled approximately 45.8 million as of September 30, 2024, a decrease of 1.5 million, or 3 percent, driven by attrition in the Medicaid business associated with eligibility redeterminations and footprint adjustments in certain Medicaid states. These losses were partially offset by growth in Employer Group fee-based and Affordable Care Act health plan membership. Operating revenue for Carelon was $13.8 billion in the third quarter of 2024, an increase of $1.8 billion, or 15 percent compared to the prior year quarter. This was driven by the launch and growth of risk-based capabilities in Carelon Services and growth in CarelonRx product revenue, related to the acquisition of Paragon Healthcare in the first quarter and increases in external members served.
ELV in the third quarter of FY 24 has reported the adjusted earnings per share of $8.37, missing the analysts’ estimates for the adjusted earnings per share of $9.66. The company had reported the adjusted revenue growth of 5.3 percent to $44.7 billion in the third quarter of FY 24, beating the analysts’ estimates for revenue of $43.46 billion. This was driven by higher premium yields in the Health Benefits segment and growth in CarelonRx product revenue, partially offset by membership attrition in the Medicaid business.
Additionally, the company declared a fourth quarter 2024 dividend to shareholders of $1.63 per share.
Given the Q3 results and ongoing Medicaid challenges, Elevance Health lowered its full-year 2024 adjusted EPS guidance to approximately $33.00, down from its previous outlook.