Elevance Health (NYSE:ELV) reported first-quarter 2026 results that surpassed analyst estimates, driven by strong operational execution in its Carelon segment and improved premium yields.
Despite facing a significant one-time regulatory charge, the Indianapolis-based healthcare giant raised its full-year adjusted earnings guidance, citing increased visibility into medical cost trends and underlying business strength.
For the quarter ended March 31, 2026, operating revenue rose 1.5 percent to $49.5 billion, up from $48.8 billion in the prior-year period.
This growth was primarily fueled by higher premium yields in the Health Benefits segment and product revenue growth within CarelonRx.
These gains helped offset anticipated membership declines in Medicaid and Medicare Advantage following recent eligibility redeterminations and strategic footprint adjustments.
GAAP diluted EPS for the quarter was $8, a decrease from the previous year largely due to a $935 million (approximately $4 per share) accrual related to a pending matter with the Centers for Medicare & Medicaid Services (CMS).
However, adjusted diluted EPS surged to $12.58, comfortably beating the Zacks Consensus Estimate of $10.61.
This result was bolstered by approximately $1 per share in non-recurring investment income and a disciplined focus on medical cost management.
Meanwhile, the company's benefit expense ratio stood at 86.8 percent, a 40-basis-point increase year-over-year, reflecting expected medical cost trends in Medicaid that were partially mitigated by improved performance in the Medicare business.
Operating cash flow was particularly strong, reaching $4.3 billion for the quarter, compared to $1 billion in Q1 2025.
During the quarter, Elevance Health returned $1.5 billion of capital to shareholders, including the repurchase of 3.7 million shares and a quarterly dividend of $1.72 per share.
Looking ahead, the company raised its FY 2026 adjusted diluted EPS guidance to at least $26.75, up from its previous floor of $25.50.
The company also reaffirmed its full-year operating cash flow target of at least $5.5 billion, inclusive of potential payments related to the CMS matter.