Elevance Health raises 2026 guidance as third-quarter EPS rises to $6.27

Elevance Health, Inc. (ELV) said Wednesday that third-quarter 2026 diluted earnings were $6.27 per share, and it raised its full-year 2026 guidance, according to a regulatory filing.

The results reflect improved operating performance and a net non-operating benefit of $1.85 per share, the company said in the press release attached to the filing.

Here's how the company did:

• Diluted EPS: $6.27, up 17.9% from $5.32 a year earlier
• Adjusted diluted EPS: $6.99, up 15.9% from $6.03 a year earlier
• Operating revenue: $50.4 billion vs. $50.1 billion a year earlier
• Operating gain: $1.3 billion, the same as a year earlier
• Shareholders' net income: $1.4 billion vs. $1.2 billion a year earlier

Operating revenue rose 0.7% to $50.4 billion, an increase of $0.4 billion. The increase was driven by higher premium yields, increased CarelonRx product revenue and growth in service fees, partly offset by lower Medicare Advantage, Medicaid and Employer Group risk membership.

The benefit expense ratio was 90.6%, an improvement of 70 basis points. The improvement was driven by better performance in Medicare Advantage and Individual ACA compared with the prior year.

The operating expense ratio was 11.4%, and the adjusted ratio was 11.3%, an increase of 90 basis points from the prior year. The increase principally reflected targeted, one-time investments in capabilities that support long-term performance, along with spending to advance business growth and quality initiatives.

Results for the first nine months included a $935 million accrual, the company's current best estimate of identified potential exposure for certain historical Medicare Advantage risk adjustment data. The accrual relates to a CMS notice dated Feb. 27, 2026.

For the first nine months, diluted EPS was $21.01, down 7.3% from $22.67, while adjusted diluted EPS was $27.06, up 0.7% from $26.88.

Medical membership was about 44.9 million as of Sept. 30, down 487 thousand from a year earlier. The decline reflected lower enrollment in Medicaid, Medicare Advantage and Employer Group risk-based businesses, partly offset by growth in Commercial fee-based membership.

Health Benefits revenue was $43.4 billion, an increase of $1.1 billion, or 3%, from a year earlier, driven by higher premium yields and service fee revenue. The segment's operating gain fell to $0.4 billion from $0.6 billion, and its operating margin was 1.0%, down from 1.4%, reflecting targeted investments to support the company's long-term operating model.

Carelon revenue was $19.3 billion, up $1.0 billion, or 5%, from a year earlier. Growth was driven by CarelonRx product revenue and continued expansion of Carelon Services risk-based solutions.

Carelon's operating gain was $0.9 billion, an increase of 17% year over year, reflecting the strong performance of Carelon Services risk-based solutions and the improved profitability of the specialty pharmacy.

Elevance Health raised full-year 2026 guidance on three measures. Diluted EPS is now at least $22.00, adjusted diluted EPS is at least $29.00, and operating cash flow is at least $6.5 billion. The filing does not give the prior guidance figures.

The adjusted outlook adds back net adjustment items of $7.00 per share, including a $4.28 per share accrual related to the CMS notice.

Beyond 2026, the company said it remains confident in delivering at least 12% growth in adjusted diluted EPS in 2027 from a higher earnings baseline of at least $26.75. That baseline excludes non-recurring net investment income, other non-operating items and targeted one-time investments.

“Elevance Health's third quarter results reflect stronger execution across our diversified portfolio and underscore the earnings power of the business,” President and Chief Executive Officer Gail K. Boudreaux said.

Operating cash flow was $1.3 billion in the quarter, an increase of $0.1 billion, primarily reflecting favorable working capital dynamics. Parent company cash and investments totaled approximately $2.4 billion as of Sept. 30.

During the quarter the company repurchased 0.8 million shares for $330 million, at a weighted average price of $398.75 per share. It paid a quarterly dividend of $1.72 per share, a distribution of $373 million. About $5.0 billion of board-approved repurchase authorization remained as of Sept. 30.

The Audit Committee declared a fourth-quarter dividend of $1.72 per share on Oct. 20, 2026. The dividend is payable Dec. 18 to shareholders of record at the close of business Dec. 4.

One-time items in the quarter included $42 million of transaction and integration related costs and $18 million of business optimization charges. Days in claims payable were 44.9 days at Sept. 30, an increase of 3.5 days year over year.

Management will host a conference call and webcast at 8:30 a.m. Eastern Daylight Time to discuss the results and outlook, the company said.

The company said its businesses serve approximately 103 million consumers through medical, pharmacy, behavioral, clinical, home health and complex care solutions.