Elevance Health forecast 2024 profit above Wall Street's expectations on Wednesday, after higher premiums in its commercial insurance business and strong demand in the Carelon health services unit helped it beat fourth-quarter sales estimates.
The raised forecast comes at a time when rivals such as Humana and UnitedHealth have flagged high costs in the fourth quarter, due to an increase in medical services among older adults.
Humana said last week that the increase in demand for medical care among older adults would hurt its fourth-quarter results and could potentially hit its 2024 outlook, if those costs persist.
However, Elevance's medical costs came in below analysts' estimates. The company said higher premiums from some of its health insurance plans accounted for the increased expense.
Its benefit expense ratio - the percentage of premiums spent by an insurer on medical care - was 89.2% in the fourth quarter, compared to analysts' average estimate of 89.4%, according to LSEG data.
Sales at its Carelon health services business, under which Elevance operates the pharmacy benefit management unit, rose 14%, to $12.4 billion in the fourth quarter.
On an adjusted basis, the health insurer expects full-year profit of more than $37.10 per share in 2024. Analysts are expecting a profit of $37.05 per share.
Its adjusted profit of $5.62 per share missed Wall Street's estimates by 2 cents in the fourth quarter. The company reported a 7.1% rise in total expenses, citing an acceleration in its investments for growth.
However, total revenue rose 7%, to $42.45 billion in the fourth quarter, above analysts' estimate of $42.05 billion.
https://finance.yahoo.com/news/1-elevance-health-forecasts-2024-112832942.html
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