Elevance Health Inc. (NYSE:ELV)

The financial data for the reported and adjusted shareholders’ net income over the five-year period exhibits notable fluctuations and trends that merit detailed analysis.

Reported Shareholders’ Net Income

This metric shows a general upward trend from 2020 through 2021, increasing from 4,572 million US dollars to 6,104 million US dollars, representing a substantial growth.

Following this peak in 2021, the reported net income slightly decreased and then stabilized in the subsequent years, with values of 6,025 million in 2022, 5,987 million in 2023, and 5,980 million in 2024. The decline from 2021's high is marginal but consistent, indicating a plateauing in reported profitability after the initial substantial increase.

Adjusted Shareholders’ Net Income

The adjusted net income presents a more variable pattern compared to the reported figures. After a growth from 5,000 million in 2020 to 5,649 million in 2021, it dramatically declined to 3,762 million in 2022, a significant reduction reflecting possible extraordinary or one-off impacts being adjusted for in this measure.

However, in 2023, adjusted net income sharply rebounded to 7,104 million, exceeding all previously recorded adjusted and reported values, indicating a strong recovery or positive adjustment in financial performance components.

In 2024, there was a decrease to 6,084 million, which, while lower than 2023’s peak, remains higher than all years except 2023 itself and above the reported net income figures.

Comparative Observations

Throughout the period, adjusted net income is generally higher than reported net income except in 2022, when it is significantly lower. This suggests that adjustments made in 2022 had a pronounced negative effect, potentially accounting for non-recurring items or restructuring costs not reflected in the reported earnings.

The sharp rebound in adjusted net income in 2023 suggests that the company experienced a favorable shift in the nature or magnitude of these adjustments or improved operational performance underlying the adjusted figures.

The reported net income figures are more stable over time, with a steady increase initially and then a moderate decline, whereas the adjusted figures demonstrate more pronounced volatility, which is consistent with the nature of adjustments reflecting extraordinary items or accounting treatments.

Net Profit Margin

The reported net profit margin shows a generally declining trend from 3.78% in 2020 to 3.41% in 2024, with a slight peak in 2021 at 4.46%. The adjusted net profit margin follows a more volatile pattern, declining from 4.14% in 2020 to a low of 2.42% in 2022, then recovering to 4.17% in 2023 before falling again to 3.47% in 2024. This indicates fluctuations in profitability when adjustments are taken into account, though overall profitability remains relatively moderate.

Return on Equity (ROE)

The reported ROE demonstrates an initial increase from 13.77% in 2020 to a peak of 16.93% in 2021, followed by a gradual decrease to 14.47% by 2024. The adjusted ROE shows greater variability, starting at 15.06% in 2020, dipping significantly to 10.36% in 2022, reaching a high of 18.07% in 2023, before settling at 14.73% in 2024. This suggests that the company's ability to generate returns on equity has experienced fluctuations, with notable improvement in 2023 under adjusted figures, but a general mild downtrend thereafter.

Return on Assets (ROA)

Reported ROA trends closely mirror those of ROE, escalating from 5.28% in 2020 to 6.26% in 2021, then gradually declining to 5.12% in 2024. The adjusted ROA shows more pronounced variability, starting at 5.77% in 2020 and 5.8% in 2021, dropping sharply to 3.66% in 2022, rebounding to a peak of 6.52% in 2023 before decreasing again to 5.2% in 2024. These fluctuations in asset efficiency reflect changes in operational performance and asset utilization, with a notable recovery period in 2023.

Overall Insights

The data reveals moderate profitability and efficiency ratios with some volatility, particularly in the adjusted metrics. The year 2022 appears as a low point across adjusted margins and returns, followed by a recovery in 2023 that does not fully sustain into 2024. The general trend for both reported and adjusted figures points to a slight erosion in profitability and returns after reaching mid-cycle peaks. This pattern may suggest operational or market challenges impacting financial performance, with occasional improvements possibly linked to specific adjustments or one-off factors.

The financial data reveals distinct patterns in both reported and adjusted figures over the observed periods. The reported shareholders’ net income displayed an upward trend from 2020 through 2021, increasing from 4572 to 6104 million US dollars. This was followed by a slight decline in 2022 and a stabilization around 5980 million US dollars in 2023 and 2024. Conversely, the adjusted shareholders’ net income showed more volatility, with an initial increase in 2021, a significant drop in 2022 to 3762 million US dollars, then a sharp recovery in 2023 reaching 7104 million, before declining again in 2024 to 6084 million.

Regarding profitability margins, the reported net profit margin increased from 3.78% in 2020 to 4.46% in 2021, then decreased consecutively in the following years, reaching 3.41% in 2024. The adjusted net profit margin similarly started at a relatively high level of 4.14% in 2020, remained nearly stable in 2021, but experienced a steep decline to 2.42% in 2022. It then rebounded substantially to 4.17% in 2023 before falling again to 3.47% in 2024.

Reported Shareholders’ Net Income

Increased significantly in 2021, followed by slight declines and a leveling off in the last two years.

Adjusted Shareholders’ Net Income

Displayed considerable fluctuations with a pronounced dip in 2022 and a peak in 2023, indicating variability in adjustments impacting earnings.

Reported Net Profit Margin

Showed an initial improvement in profitability in 2021 but weakened in subsequent years, indicating pressure on profit margins.

Adjusted Net Profit Margin

Reflected greater volatility than the reported margin, with a notable dip in 2022 and recovery in 2023, suggesting that adjustment factors significantly influenced profitability representation.

Overall, the data indicates that while reported net income and margins tend to demonstrate a more stable, gradual pattern, the adjusted figures reveal substantial variability, particularly around 2022 and 2023. This suggests that one-time or non-recurring items included in adjustments had a pronounced effect on the adjusted profitability and earnings during these years. The downward trend in reported profit margin in the latter part of the period signals a potential pressure on operational efficiency or increased costs relative to revenue. The divergence between reported and adjusted figures underscores the importance of considering both perspectives when evaluating profitability trends.

Reported shareholders’ net income

The reported shareholders’ net income increased from 4572 million USD in 2020 to 6104 million USD in 2021, showing a strong upward trend. However, it slightly declined in 2022 to 6025 million USD and remained relatively stable through 2023 and 2024, with values of 5987 million USD and 5980 million USD respectively. This indicates a peak in 2021 followed by a slight but consistent decrease.

Adjusted shareholders’ net income

Adjusted shareholders’ net income showed fluctuating behavior over the period. It increased from 5000 million USD in 2020 to 5649 million USD in 2021, then declined sharply to 3762 million USD in 2022. Subsequently, a significant recovery occurred in 2023, reaching 7104 million USD, before decreasing again to 6084 million USD in 2024. This pattern suggests notable volatility in adjusted earnings, with a pronounced dip in 2022 and a peak in 2023.

Reported Return on Equity (ROE)

Reported ROE improved from 13.77% in 2020 to 16.93% in 2021, indicating enhanced profitability and efficiency. It slightly declined in 2022 to 16.59%, followed by a further decrease to 15.23% in 2023 and 14.47% in 2024. Despite the downward trend after 2021, the ROE remained above the 2020 level throughout the period.

Adjusted Return on Equity (ROE)

Adjusted ROE showed a mixed trend, beginning at 15.06% in 2020 and rising slightly to 15.67% in 2021. It then sharply dropped to 10.36% in 2022, reflecting the decline in adjusted net income. A significant recovery was observed in 2023, with ROE climbing to 18.07%, before decreasing to 14.73% in 2024. This fluctuation aligns with the volatility observed in adjusted net income and implies sensitivity to underlying adjustments.

The financial performance, as measured by reported shareholders’ net income, showed an increasing trend from 2020 to 2021, rising from 4572 million US dollars to 6104 million US dollars. This was followed by a slight decline during the subsequent years, with values decreasing to 6025 million in 2022, then slightly lower in 2023 and 2024, ending at 5980 million US dollars. In contrast, adjusted shareholders’ net income exhibited some volatility; after increasing from 5000 million in 2020 to 5649 million in 2021, it experienced a significant decline in 2022 to 3762 million. This was then followed by a strong rebound in 2023, reaching 7104 million US dollars, before decreasing again to 6084 million in 2024.

Regarding profitability ratios, the reported return on assets (ROA) increased from 5.28% in 2020 to a peak of 6.26% in 2021, before gradually declining in the following years, reaching 5.12% by 2024. The adjusted ROA followed a similar but more fluctuating pattern: it increased marginally from 5.77% in 2020 to 5.8% in 2021, then dropped significantly to 3.66% in 2022. This was followed by a notable recovery to 6.52% in 2023, before falling again to 5.2% in 2024.

Net Income Trends

Reported net income shows initial growth with a gradual decline afterward, indicating some stabilization below the peak achieved in 2021.

Adjusted net income highlights a period of volatility with a sharp drop in 2022 and a strong rebound in 2023, suggesting the impact of adjustment factors on earnings performance.

Return on Assets Trends

Reported ROA peaked in 2021 and then experienced a gradual decline, suggesting some decrease in asset efficiency over the later periods.

Adjusted ROA demonstrates more pronounced fluctuations, indicating potential variability in core operational returns when adjustments are considered, with a notable recovery in 2023.

Overall Insights

The divergence between reported and adjusted figures suggests that non-operational or one-time adjustments have had a considerable impact on the company’s earnings and efficiency metrics.

The strong rebound in adjusted earnings and ROA in 2023 points to a recovery phase following a challenging 2022.

The gradual decline in reported figures after 2021 may indicate emerging challenges in maintaining peak profitability levels seen in earlier years.