Elevance Health beats estimates but shares fall on margin concerns

Investing.com -- Elevance Health Inc. (NYSE: ELV) reported second-quarter results that exceeded analyst expectations, though shares fell 3.9% premarket as investors focused on declining operating margins.

The health insurer posted adjusted earnings per share of $7.45, beating the analyst consensus of $6.21 by $1.24. Revenue reached $49.8 billion, up 0.8% YoY from $49.4 billion and above the $48.63 billion analyst estimate. The company's results were supported by favorable benefit expense performance and an approximately $0.80 per share net below-the-line benefit.

Despite the earnings beat, the company's operating margin fell to 3.5% from 4.9% in the prior year quarter, while the adjusted operating margin declined to 3.6% from 5.0%. The benefit expense ratio increased 80 basis points YoY to 89.7%, driven by elevated medical cost trends in government businesses, though partially offset by improved Individual ACA performance.

"Our second quarter results exceeded our outlook, supported by disciplined execution and improved operating performance across our diversified portfolio," said Gail K. Boudreaux, President and Chief Executive Officer.

Elevance raised its fiscal 2026 adjusted EPS guidance to at least $27.00 from a previous target, slightly above the analyst consensus of $26.91. The company also increased its operating cash flow guidance to at least $6.0 billion.

Medical membership totaled approximately 44.9 million as of June 30, 2026, down 469,000 sequentially due to a commercial fee-based customer transition and anticipated attrition in Individual ACA and Medicaid membership. The Health Benefits segment generated $42.7 billion in revenue, up 3% YoY, while Carelon revenue grew 6% to $19.2 billion.

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