UPDATED: 1:45 p.m. ET on July 17
Elevance Health CEO Gail Boudreaux kicked off the company's second-quarter earnings call by immediately acknowledging that its decision to lower its guidance for the year will spook some investors.
"Let me start by directly addressing our revised full year outlook," she said. "We know this adjustment is disappointing, and we're taking concrete actions to address it."
Boudreaux said that while external factors are still shifting, the team is "focused on the areas that are within our control," such as targeted investments, cost management and an emphasis on creating long-term value.
In its earnings report released earlier Thursday, Elevance revealed that it will lower its profit outlook for the year to $30 per share, down from its previous estimates of between $34.15 and $34.85. The insurer flagged that it was seeing choppy seas ahead for the Affordable Care Act marketplaces and Medicaid.
Other payers in these markets, Centene and Molina Healthcare, have also run similar alarms.
"This reset reflects the same pressures that others in the sector have now confirmed, particularly elevated medical cost trends across ACA and slower-than-expected Medicaid rate alignment," Boudreaux said.
The company's stock was down by about 11% at mid-day Thursday, and the results drove down some of its competitors too. Shares in Centene were down by 3.6%, and Molina's stock was down by nearly 5%.
Boudreaux said that making adjustment to the outlook offers key transparency to investors and ensures that the company is well-positioned to take steps to mitigate the challenges quickly. The insurer is putting particular focus on high-cost areas like specialty care, post-acute care and some outpatient settings.
She added that the company has also already repriced its ACA plans to account for the higher costs.
"We recognize that revising guidance for the second consecutive year is disappointing, and we remain committed to transparency and strong execution as we continue to navigate unprecedented cost trend affecting multiple lines of business," Boudreaux said. "We remain confident in the strength of our enterprise, the impact of our investments and our ability to create long-term value through operational discipline, innovation and our commitment to whole health transformation."
Shares in Elevance Health dipped slightly premarket as the insurer reported $1.7 billion in profit for the second quarter of 2025, falling short of Wall Street analysts' expectations.
That figure is down by 24% from the $2.3 billion in profit that Elevance earned in Q2 2024. That equals $8.84 in earnings per share, while investors had anticipated $9.16 per share, according to Zacks Investment Research.
Mid-year profits are also down compared to 2024, according to the company's earnings report released on Thursday. Through the first six months of the year, Elevance Health has earned $3.9 billion in profit, a 13.6% decrease from 2024's H1 tally of $4.5 billion,
While the company did miss on earnings, Elevance surpassed analysts' predictions on revenue, posting $49.8 billion. Investors had anticipated $48.2 billion, per Zacks.
Revenues were up by 13% year-over-year, as the company reported $43.9 billion in Q2 2024. Mid-year revenues were $98.7 billion, according to the report.
Elevance Health is the latest insurer to sound the alarm on elevated costs in the Affordable Care Act's marketplaces. In the earnings press release, CEO Gail Boudreaux said the company will adjust its outlook for the year based on those cost trends and "slower rate alignment in Medicaid."
"While the external environment continues to evolve, we are focused on the areas within our control—managing healthcare costs, deploying targeted investments in advanced technology and value-based care delivery, and reinforcing the operational foundation that supports long-term value creation," she said.
The company now expects to earn $30 in earnings per share for the full year, down from its previous estimates of between $34.15 and $34.85 per share.
Elevance Health's medical loss ratio was 88.9% in the second quarter, higher than the 86.4% it reported in the first quarter and reflecting those expected pressures in the ACA and Medicaid markets.
The insurer reported 45.6 million members as of Q2, down by about 212,000 due to lower Medicaid enrollment and lower effectuation rates in the ACA marketplaces.