Why Is Elevance Health (ELV) Up 7.3% Since Last Earnings Report?

Core Viewpoint - Elevance Health reported a strong Q2 2024 earnings performance, with adjusted earnings per share surpassing estimates, although operating revenues showed a slight decline year over year. The company faces challenges with membership attrition in Medicaid, impacting overall margins and premium revenues [2][3][4]. Financial Performance - Adjusted earnings for Q2 2024 were $10.12 per share, exceeding the Zacks Consensus Estimate by 1.3% and reflecting a 12% year-over-year improvement [2]. - Operating revenues totaled $43.2 billion, a decrease of 0.4% year over year, but still beating the consensus mark by 0.5% [2]. - Total expenses were $40.9 billion, down 0.8% year over year, attributed to lower benefit expenses [6]. Membership and Revenue Breakdown - Medical membership stood at approximately 45.8 million, down 5% year over year, missing estimates [4]. - Premium revenues decreased by 3.2% year over year to $35.4 billion, falling short of consensus estimates [5]. - Product revenues increased by 13.8% year over year to $5.5 billion, exceeding expectations [5]. Segment Performance - Health Benefits segment revenues were $37.2 billion, down 2.2% year over year, with an operating gain of $2.1 billion [7]. - Carelon segment revenues rose 10% year over year to $13.3 billion, driven by new services and acquisitions [8]. - Corporate & Other segment revenues improved by 8.9% year over year to $122 million, with a reduced operating loss [10]. Financial Position - As of June 30, 2024, cash and cash equivalents were $6.5 billion, with total assets at $113 billion [11]. - Long-term debt increased by 5.7% to $24.6 billion, while total equity rose by 7.3% to $42.3 billion [11][12]. - The company generated net cash flow from operations of $2.4 billion in the first half of 2024, down from $8.4 billion in the prior year [12]. Capital Deployment - Elevance Health repurchased shares worth $462 million in Q2 2024, with a remaining buyback capacity of approximately $3.2 billion [13]. - The company paid a quarterly dividend of $1.63 per share, totaling $378 million [13]. 2024 Outlook - Adjusted earnings are projected to be at least $37.20 per share, indicating a 12% increase from 2023 [14]. - Operating revenues are expected to show flat to low single-digit growth, with premium revenues anticipated to remain stable [15]. - Medical enrollment is forecasted to be between 45.8 and 46.6 million [15].