Elevance Health projected it will beat its earnings guidance in the first quarter and said medical costs are in line with expectations, contrasting with UnitedHealth Group's disappointing first-quarter results.
The insurer is set to report its first-quarter results Tuesday but released preliminary numbers Thursday that indicate first-quarter earnings will surpass initial projections, according to a filing with the U.S. Securities and Exchange Commission (SEC).
The company announced an adjusted earnings per share of $11.97 for the first quarter, which exceeds both its internal guidance of $11.62 and the consensus forecast of $11.32 from analysts.
The company expects to report first-quarter GAAP shareholders’ net income of $9.61 per diluted share, including approximately $2.36 per diluted share of net unfavorable items.
"First quarter results reflect medical cost trends that developed in line with the company’s expectations, including in its Medicare Advantage (MA) business. While cost trends in Medicare Advantage remain elevated, the company’s first quarter experience was consistent with its expectations and pricing," Elevance Health reported in the SEC filing.
UnitedHealth Group, the country’s largest provider of MA plans, dismayed investors when it reported first-quarter revenue and earnings that missed Wall Street analysts' expectations. The healthcare giant also cut its earnings guidance after reporting higher-than-expected care costs in its MA businesses, "far above" the planned 2025 increase.
UnitedHealth Group CEO Andrew Witty described the first-quarter results as "unusual and unacceptable" on a call with investors Thursday.
The company's shares plunged 23% Thursday and remained at that level Friday.
UnitedHealth's first-quarter results also pulled down other health insurers' shares Thursday. Elevance Health's shares slumped 10% Thursday after markets opened, but the stock rebounded after it submitted the SEC filing.
Humana’s shares tumbled 7%, and CVS Health, which owns Aetna, was down about 2%.
Elevance Health reaffirmed shareholders’ adjusted net income guidance for full year 2025 to be $34.15 to $34.85 per diluted share.
The company continues to expect its MA program to hit 2.2 million to 2.25 million members in 2025, in line with the guidance provided during its fourth-quarter results back in January, it said in the SEC filing.
Company executives told investors three months ago that they're confident in their 7% to 9% growth targets in MA based on early data coming out of the annual enrollment period.
Given the pressures on the MA program—ranging from lowered rates to ongoing elevated utilization—the insurer took a targeted approach as it planned for growth in this market, said Felicia Norwood, executive vice president and president of government health benefits for Elevance, during the full-year and fourth-quarter earnings call.
Elevance Health posted $418 million in profit for the fourth quarter of 2024 and earned $45 billion in revenue in the quarter.
For full-year 2024, Elevance reported $175.2 billion in revenue, an increase of 2.9% over its $170.2 billion haul in 2023. Profits for the full year were also on par with 2023, according to the report, with the company earning $5.98 billion in profit for 2024 compared to $5.987 billion in 2023.
Elevance Health had 45.7 million members across all of its offerings as of Dec. 31, according to the fourth-quarter report.