Elevance Health raised its full-year outlook after Q2 earnings topped estimates, but shares fell on margin contraction concerns.
Elevance Health reported second-quarter adjusted earnings per share of 7.45 dollars, surpassing the 6.21-dollar analyst estimate. Revenue rose 0.8 percent year on year to 49.8 billion dollars, exceeding expectations of 48.63 billion dollars. The company attributed results to favorable medical benefit trends and a 0.80-dollar-per-share net benefit.
Operating margin declined to 3.5 percent from 4.9 percent a year earlier, while adjusted operating margin fell to 3.6 percent from 5.0 percent. The Health Benefits segment saw margins drop to 2.1 percent from 3.8 percent, with the benefit expense ratio rising 80 basis points to 89.7 percent due to higher medical costs in government programs.
Shares fell more than 9 percent in premarket trading as investors focused on margin pressure despite the earnings beat and raised full-year outlook.