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Elevance raises 2026 profit outlook as medical-cost ratio improves
Third-quarter operating revenue reached $50.4 billion and the benefit expense ratio improved to 90.6%, prompting Elevance to lift adjusted EPS guidance to at least $29 while membership continued to decline.
Elevance Health raised its 2026 earnings outlook after third-quarter results showed better medical-cost performance, even as total medical membership fell. The quarter combined a stronger profit guide with important limits: part of the EPS beat came from non-operating income, and enrollment remained lower than a year earlier.
What changed in the outlook
Elevance lifted full-year diluted EPS guidance to at least $22 and adjusted diluted EPS guidance to at least $29. The company also raised operating cash-flow guidance to at least $6.5 billion. Reuters reported that the previous adjusted EPS guide was at least $27 and that the new figure stood above the $27.23 LSEG consensus.
Revenue rose, but membership contracted
Third-quarter operating revenue was $50.4 billion, up 0.7% year over year. Health Benefits revenue increased 3% to $43.4 billion as higher premium yields and service fees offset lower Medicare Advantage, Medicaid and employer-group risk membership. Total medical membership was about 44.9 million, down 487,000 from a year earlier.
Medical costs came in better than expected
The benefit expense ratio was 90.6%, an improvement of 70 basis points from the prior-year quarter. Reuters said analysts had expected 91.17%. Elevance attributed the improvement to better performance in Medicare Advantage and individual Affordable Care Act plans compared with a year earlier.
The earnings beat needs context
Adjusted diluted EPS was $6.99, but the company said this included a net non-operating benefit of $1.85 a share. Reuters reported an analyst estimate of $4.68 and noted that one analyst expected a muted market reaction because non-operating items drove much of the beat. The distinction prevents the quarter from being read as a pure operating-margin surge.
Carelon grew faster than the group
Carelon operating revenue increased 5% to $19.3 billion, supported by CarelonRx product revenue and expansion of Carelon Services risk-based solutions. Carelon operating gain rose 17% to $0.9 billion. Elevance also named Jeff Park president of Carelon effective December 1, according to Reuters.
What remains uncertain
Elevance said it expects at least 12% adjusted EPS growth in 2027 from a baseline of at least $26.75 that excludes specified non-recurring and non-operating items. That is a forward-looking target rather than a completed result. Membership trends, medical utilization, pricing and the mix of government-backed plans remain variables that could alter the path.
