Elevance Health surprised Wall Street with a rare, late-year guidance cut Thursday after a jump in Medicaid costs marred its third quarter.
Shares of the Blue Cross-Blue Shield insurer tumbled after it joined rival UnitedHealth in noting that rates it receives for managing government-funded Medicaid programs weren't enough to offset a rise in costs.
Elevance dropped its forecast for 2024 adjusted earnings to approximately 33 per share after predicting at least 37.20 in July.
Wall Street was expecting 37.25 per share, according to the data firm FactSet.
UnitedHealth also tightened its forecast when it reported third-quarter results Tuesday. Insurers typically act conservatively with forecasts this late in the year and focus on signaling to investors how the coming year will play out.
