Shares of health insurance provider Elevance Health (ELV) ascended to their peak level since the end of 2022 on Thursday. The ascent was the result of the company beating projected results for the first quarter and upping its guidance, owing to lower costs. The first-quarter earnings per share (EPS) of Elevance were recorded at $10.64, with a 0.9% revenue increase to $42.3 billion. Both these figures surpassed analysts' predictions.
The benefit-expense ratio of the company, which is the premium-to-claims cost ratio, witnessed an improvement of 20 basis points (bps) to 85.6%, outperforming forecasts. The firm attributed the gain primarily to premium rate alterations aimed at covering healthcare cost trends in its Health Benefits business.
While the revenue from the premiums slipped by 0.5% to $35.7 billion, benefit expenses dipped by 0.8% to $30.55 billion. As a result, the total operating margin lifted from 6.8% last year to 7.1%.
The CEO of Elevance, Gail Boudreaux, stated that the results are an illustration of the disciplined execution of strategic initiatives amidst a dynamic time in the industry. Consequently, the total anticipated EPS for the year is now greater than $37.20, a slight rise from the previous forecast of greater than $37.10.
In the late hours of Thursday, Elevance Health Shares traded at their highest since December 2022. Their value was up by 3.8%, hovering around $528.26 at around 3:45 p.m. ET.