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Elevance Health (NYSE:ELV) just dropped its Q4 earnings, and it's a mixed bag. Revenue climbed 6% to $45 billion, fueled by higher premium yields and a 19% surge in its Carelon division. But medical costs? Still a major headache. Net income took a 50% hit, landing at $418 million, as Medicaid-related expenses kept rising. The benefit expense ratio shot up to 92.4%, a clear sign that the company is still dealing with a flood of Medicaid patients catching up on postponed care.
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Despite the cost surge, Elevance gave investors something to cheer about: a 5% dividend boost to $1.71 per share. CEO Gail Boudreaux doubled down on the company's strategy, emphasizing operational improvements and a push for long-term growth. The 2025 outlook? Adjusted EPS projected between $34.15 and $34.85, signaling confidence in navigating industry pressures. But the Medicaid drag is realmembership dipped by 1.1 million, now sitting at 45.7 million.
Investors responded positively, sending Elevance shares higher post-earnings. The big question: Can Elevance keep costs in check while leveraging premium hikes, acquisitions, and Carelon's expansion? The long-term play looks solid, but short-term turbulence is far from over.
This article first appeared on GuruFocus.