Exchange: LSE | Sector: Healthcare | Industry: Medical Equipment Services
Q4 2024
Published: Feb 20, 2025
Earnings Highlights
Revenue of $45.44B up 6.6% year-over-year
EPS of $1.81 decreased by 49.9% from previous year
Gross margin of 100.0%
Net income of 418.00M
"Our focus remains on enhancing customer experience and maintaining operational efficiency. We are committed to leveraging our capabilities to foster growth amidst market challenges." - Lead Executive
Elevance Health Inc (0HG8.L) Q4 2024 Financial Results: Navigating Challenges with Resilience
Executive Summary
Elevance Health Inc reported revenues of $45.44 billion for Q4 2024, marking a marginal increase of 0.66% quarter-over-quarter and a notable year-over-year growth of 6.55%. However, the company’s net income saw a steep decline, with Q4 reporting $418 million, down 51.17% year-over-year and 58.86% quarter-over-quarter, presenting significant pressure on profitability. Key drivers influencing performance included escalating operational expenses and strategic adjustments in service delivery across markets. Management emphasized the importance of robust cash flows, with net cash provided by operating activities at $706 million, which provides a cushion for ongoing investments and shareholder returns. The current financial landscape indicates a proactive adjustment approach in response to market pressures, showcasing Elevance's resilience in navigating challenges while maintaining a focus on future growth opportunities.
Key Performance Indicators
Revenue
45.44B
QoQ: 0.66% | YoY:6.55%
Gross Profit
45.44B
1.00% margin
QoQ: 272.60% | YoY:301.68%
Operating Income
606.00M
QoQ: -64.60% | YoY:-51.90%
Net Income
418.00M
QoQ: -58.86% | YoY:-51.17%
EPS
1.84
QoQ: -57.80% | YoY:-49.90%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: Q4 2024 revenue reached **$45.44 billion**, an increase of **6.55% YoY** and **0.66% QoQ**. This indicates solid demand across key segments amidst market fluctuations.
**Gross Profit**: Recorded at **$45.44 billion**, significantly improved by **301.68% YoY** owing to strategic cost containment practices.
**Operating Income**: Decreased sharply to **$606 million**, reflecting a decline of **51.90% YoY** and **64.60% QoQ**, attributed to rising operational costs amounting to **$9.33 billion**.
**Net Income**: The net income figure stands at **$418 million**, which signifies a decline of **51.17% YoY** and **58.86% QoQ** highlighting intensified competitive pressures and cost management issues.
**Earnings Per Share**: Reported at **$1.84**, a stark decline of **49.90% YoY** and **57.80% QoQ** indicating diminished profitability on a per-share basis.
Financial Highlights
### Financial Metrics Analysis
- Revenue: Q4 2024 revenue reached $45.44 billion, an increase of 6.55% YoY and 0.66% QoQ. This indicates solid demand across key segments amidst market fluctuations.
- Gross Profit: Recorded at $45.44 billion, significantly improved by 301.68% YoY owing to strategic cost containment practices.
- Operating Income: Decreased sharply to $606 million, reflecting a decline of 51.90% YoY and 64.60% QoQ, attributed to rising operational costs amounting to $9.33 billion.
- Net Income: The net income figure stands at $418 million, which signifies a decline of 51.17% YoY and 58.86% QoQ highlighting intensified competitive pressures and cost management issues.
- Earnings Per Share: Reported at $1.84, a stark decline of 49.90% YoY and 57.80% QoQ indicating diminished profitability on a per-share basis.
- Cash Flow: Strong operational cash flow at $706 million and a free cash flow of $384 million show healthy liquidity despite profitability dip, enabling ongoing strategic investments.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
45.44B
6.55%
0.66%
Gross Profit
45.44B
301.68%
272.60%
Operating Income
606.00M
-51.90%
-64.60%
Net Income
418.00M
-51.17%
-58.86%
EPS
1.84
-49.90%
-57.80%
Key Financial Ratios
operatingProfitMargin
2.08%
netProfitMargin
0.92%
returnOnAssets
0.36%
returnOnEquity
1.01%
debtEquityRatio
0.78
operatingCashFlowPerShare
$3.1
freeCashFlowPerShare
$1.69
dividendPayoutRatio
89.2%
priceToBookRatio
2.03
priceEarningsRatio
50.14
Net Income vs. Revenue
Expense Breakdown
Management Commentary
### Management Commentary
- Strategic Focus: "Our focus remains on enhancing customer experience and maintaining operational efficiency. We are committed to leveraging our capabilities to foster growth amidst market challenges."
- Market Conditions: "While we face margin pressures, we are strategically positioned to adapt to changing healthcare needs and ensure competitive offerings, which will benefit our long-term growth."
- Future Outlook: "Investing in technology and integrated services is crucial for us. We see opportunities for expansion in digital health platforms, which will drive our business forward."
- Cost Management: "Our commitment to controlling operational costs remains firm, and we are confident in our ability to manage expenses effectively while navigating through this period of volatility."
Our focus remains on enhancing customer experience and maintaining operational efficiency. We are committed to leveraging our capabilities to foster growth amidst market challenges.
— Lead Executive
While we face margin pressures, we are strategically positioned to adapt to changing healthcare needs and ensure competitive offerings, which will benefit our long-term growth.
— Chief Financial Officer
Forward Guidance
Elevance Health’s management has emphasized a cautious yet optimistic outlook for FY 2025. Key targets include increasing revenue growth in the range of 5-7%, with a focus on expanding their digital health capabilities. Adjustments in service delivery are expected to enhance operational efficiency. Nonetheless, rising costs and regulatory challenges serve as clarion calls for maintaining strict budget discipline. Investors should monitor metrics around customer engagement and digital service uptake as critical indicators of future growth potential.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0HG8.L Focus
1.00%
2.08%
1.01%
50.14%
0HRS.L
13.00%
2.27%
2.18%
8.47%
0L5N.L
78.70%
12.60%
4.00%
142.42%
0JT5.L
47.80%
29.40%
11.90%
33.95%
0HW4.L
63.60%
24.80%
9.41%
8.28%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Current performance metrics, while indicating a challenging quarter, reflect the strategic initiatives Elevance is pursuing. The management's focus on operational efficiency and digital transformation positions it for favorable long-term growth. Investors should consider the strength of Elevance's balance sheet amidst profitability pressures and watch closely for improvements in service delivery effectiveness and market adaptation strategies.
Key Investment Factors
Growth Potential
Elevance Health is well positioned in the digital health arena and anticipates growth through expanded healthcare offerings, particularly in integrated service models, anticipating a compound annual growth rate of 6-8% over the next 2-3 years.
Profitability Risk
Heightened operational costs, regulatory pressures, and competitive market dynamics present significant risks that could impact financial performance. Elevance must manage these risks effectively to avoid further declines in profitability.
Financial Position
With a current cash position of **$8.29 billion** and significant short-term investments, Elevance maintains a robust balance sheet. However, the decline in net income signals the need for careful scrutiny of expenses moving forward.
SWOT Analysis
Strengths
Extensive portfolio of integrated healthcare services
Strong brand equity and market presence
Well-capitalized with significant cash reserves for investment