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eHealth (EHTH) Incurs Q2 Loss on Weak Employer and Individual Unit
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eHealth, Inc. (EHTH - Free Report) incurred a second-quarter 2024 adjusted loss of $1.09 per share, wider than the Zacks Consensus Estimate of a loss of 71 cents per share and the prior-year quarter’s loss of $1.05 per share.
Revenues dipped 1% year over year to $65.9 million. The top line outpaced the consensus mark by 18%.
The quarterly results suffered a blow due to an elevated expense level, particularly in marketing and advertising. The Employer and Individual segment saw decreased revenues and profit. Nevertheless, the downside was partly offset by growth in Medicare application volume across agency and carrier-dedicated platforms. Strong retention rates, favorable cash collection trends and higher commissions from Medicare Advantage plan-approved members also contributed to the upside.
Commissions declined 6% year over year to $56.8 million, higher than the Zacks Consensus Estimate of $50.3 million. Other revenues of $9 million climbed 37% year over year and surpassed the consensus mark of $8.4 million.
Total operating costs and expenses were $93.8 million, up 1% year over year due to higher marketing and advertising expenses. Interest expenses increased 5% year over year to $2.8 million.
EHTH incurred a net loss of $28 million, wider than the prior-year quarter’s loss of $23.5 million. Adjusted EBITDA was a negative figure of $15.5 million.
Segmental Update
Medicare: The unit recorded revenues of $59.2 million, which rose 7% year over year. Segmental profit totaled $1.3 million against the prior-year quarter’s loss of $2.1 million. The segment benefited on the back of higher commissions from approved members. Medicare Advantage plan approved members grew 6% from the year-ago period.
Employer and Individual: Revenues from the segment dropped 42% year over year to $6.6 million. Segmental profit of $0.9 million plunged 87% year over year. The segment was hurt by decreased individual and family, small business and ancillary approved members.
Financial Update (as of Jun 30, 2024)
eHealth exited the second quarter with cash and cash equivalents of $126.3 million, which advanced 9.2% from the 2023-end level. Total assets of $1 billion fell 6.7% from the figure at 2023 end.
There was no long-term debt for the company at the second-quarter end. Short-term debt amounted to $68.7 million.
Total stockholders’ equity of $548.9 million decreased 9.4% from the 2023-end figure.
Net cash used in operations amounted to $32.2 million while the metric was recorded at $9.4 million in the prior-year quarter.
2024 View Updated
eHealth expects revenues to be within the range of $470-$495 million, higher than the previous view of $450-$475 million. The midpoint of the revised guidance indicates an improvement of 6.5% from the 2023 figure.
GAAP net loss is projected within the range of $36.5-$22 million compared with the earlier view of $40-$20 million.
Adjusted EBITDA is currently anticipated to be within the band of $7.5-$25 million while the previous guidance called for the metric to lie between a loss of $5 million and a profit of $20 million.
Of the insurance industry players that have reported second-quarter 2024 results so far, the bottom-line results of Arch Capital Group Ltd. (ACGL - Free Report) , The Hartford Financial Services Group, Inc. (HIG - Free Report) and CNO Financial Group, Inc. (CNO - Free Report) beat the respective Zacks Consensus Estimate.
Arch Capital reported second-quarter 2024 operating income of $2.57 per share, which beat the Zacks Consensus Estimate by 18.4%. The bottom line increased 33.8% year over year. Gross premiums written improved 11.1% to $5.3 billion. Net premiums written climbed 10.3% to $3.7 billion. Pre-tax net investment income increased 50.4% year over year to $364 million. Operating revenues of $3.9 billion rose 22.6% year over year. The metric beat the consensus estimate by 0.6%.
Arch Capital’s underwriting income increased 25.7% year over year to $762 million. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 110 bps to 78.7. In the Insurance segment, gross premiums written increased 7.5% to $2.1 billion. Net premiums written climbed 7.2% year over year to $1.5 billion. The Reinsurance unit’s net premiums written rose 13.9% year over year to $1.9 billion. Underwriting income was $366 million, up 49.4% year over year.
Hartford Financial’s second-quarter adjusted operating earnings of $2.50 per share beat the Zacks Consensus Estimate by 10.6%. The bottom line climbed 33% year over year. Operating revenues of HIG amounted to $4.46 billion, which improved 9.4% year over year. However, the top line missed the consensus mark of $4.49 billion. Earned premiums rose 6.9% to $5.6 billion. Pre-tax net investment income of $602 million grew 11.5% year over year. Pretax income of $912 million increased 35.7% year over year.
The Commercial Lines segment’s revenues amounted to $3.5 billion, which rose 8.5% year over year. Core earnings of $551 million climbed 11.8% year over year. Meanwhile, the Personal Lines unit recorded revenues of $924 million, which improved 12.7% year over year. The underlying combined ratio of 96.7% improved 500 bps year over year. The Group Benefits segment’s revenues grew 2.6% to $1.8 billion.
CNO Financial reported second-quarter adjusted earnings per share of $1.05, which beat the Zacks Consensus Estimate by 45.8%. Moreover, the bottom line rose 94.4% year over year. Total revenues increased 4.2% to $1.07 billion. The top line beat the consensus mark by 16.4%. Total insurance policy income of $641.5 million improved 2.1% year over year. CNO’s net investment income increased 2.4% year over year to $409.1 million.
General account assets grew 8.3% to $351.7 million and beat the consensus mark by 14.1%. However, the policyholder and other special-purpose portfolios declined 37.3% year over year to $57.4 million. Annuity collected premiums of $439.1 million increased 9.3% year over year. New annualized premiums for health and life products improved 4.3% to $102.9 million. Annuity, Health and Life products accounted for 27.7%, 49.4% and 22.9%, respectively, of CNO’s insurance margin.
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eHealth (EHTH) Incurs Q2 Loss on Weak Employer and Individual Unit
eHealth, Inc. (EHTH - Free Report) incurred a second-quarter 2024 adjusted loss of $1.09 per share, wider than the Zacks Consensus Estimate of a loss of 71 cents per share and the prior-year quarter’s loss of $1.05 per share.
Revenues dipped 1% year over year to $65.9 million. The top line outpaced the consensus mark by 18%.
The quarterly results suffered a blow due to an elevated expense level, particularly in marketing and advertising. The Employer and Individual segment saw decreased revenues and profit. Nevertheless, the downside was partly offset by growth in Medicare application volume across agency and carrier-dedicated platforms. Strong retention rates, favorable cash collection trends and higher commissions from Medicare Advantage plan-approved members also contributed to the upside.
eHealth, Inc. Price, Consensus and EPS Surprise
eHealth, Inc. price-consensus-eps-surprise-chart | eHealth, Inc. Quote
Quarterly Operational Update
Commissions declined 6% year over year to $56.8 million, higher than the Zacks Consensus Estimate of $50.3 million. Other revenues of $9 million climbed 37% year over year and surpassed the consensus mark of $8.4 million.
Total operating costs and expenses were $93.8 million, up 1% year over year due to higher marketing and advertising expenses. Interest expenses increased 5% year over year to $2.8 million.
EHTH incurred a net loss of $28 million, wider than the prior-year quarter’s loss of $23.5 million. Adjusted EBITDA was a negative figure of $15.5 million.
Segmental Update
Medicare: The unit recorded revenues of $59.2 million, which rose 7% year over year. Segmental profit totaled $1.3 million against the prior-year quarter’s loss of $2.1 million. The segment benefited on the back of higher commissions from approved members. Medicare Advantage plan approved members grew 6% from the year-ago period.
Employer and Individual: Revenues from the segment dropped 42% year over year to $6.6 million. Segmental profit of $0.9 million plunged 87% year over year. The segment was hurt by decreased individual and family, small business and ancillary approved members.
Financial Update (as of Jun 30, 2024)
eHealth exited the second quarter with cash and cash equivalents of $126.3 million, which advanced 9.2% from the 2023-end level. Total assets of $1 billion fell 6.7% from the figure at 2023 end.
There was no long-term debt for the company at the second-quarter end. Short-term debt amounted to $68.7 million.
Total stockholders’ equity of $548.9 million decreased 9.4% from the 2023-end figure.
Net cash used in operations amounted to $32.2 million while the metric was recorded at $9.4 million in the prior-year quarter.
2024 View Updated
eHealth expects revenues to be within the range of $470-$495 million, higher than the previous view of $450-$475 million. The midpoint of the revised guidance indicates an improvement of 6.5% from the 2023 figure.
GAAP net loss is projected within the range of $36.5-$22 million compared with the earlier view of $40-$20 million.
Adjusted EBITDA is currently anticipated to be within the band of $7.5-$25 million while the previous guidance called for the metric to lie between a loss of $5 million and a profit of $20 million.
Zacks Rank
eHealth currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported second-quarter 2024 results so far, the bottom-line results of Arch Capital Group Ltd. (ACGL - Free Report) , The Hartford Financial Services Group, Inc. (HIG - Free Report) and CNO Financial Group, Inc. (CNO - Free Report) beat the respective Zacks Consensus Estimate.
Arch Capital reported second-quarter 2024 operating income of $2.57 per share, which beat the Zacks Consensus Estimate by 18.4%. The bottom line increased 33.8% year over year. Gross premiums written improved 11.1% to $5.3 billion. Net premiums written climbed 10.3% to $3.7 billion. Pre-tax net investment income increased 50.4% year over year to $364 million. Operating revenues of $3.9 billion rose 22.6% year over year. The metric beat the consensus estimate by 0.6%.
Arch Capital’s underwriting income increased 25.7% year over year to $762 million. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 110 bps to 78.7. In the Insurance segment, gross premiums written increased 7.5% to $2.1 billion. Net premiums written climbed 7.2% year over year to $1.5 billion. The Reinsurance unit’s net premiums written rose 13.9% year over year to $1.9 billion. Underwriting income was $366 million, up 49.4% year over year.
Hartford Financial’s second-quarter adjusted operating earnings of $2.50 per share beat the Zacks Consensus Estimate by 10.6%. The bottom line climbed 33% year over year. Operating revenues of HIG amounted to $4.46 billion, which improved 9.4% year over year. However, the top line missed the consensus mark of $4.49 billion. Earned premiums rose 6.9% to $5.6 billion. Pre-tax net investment income of $602 million grew 11.5% year over year. Pretax income of $912 million increased 35.7% year over year.
The Commercial Lines segment’s revenues amounted to $3.5 billion, which rose 8.5% year over year. Core earnings of $551 million climbed 11.8% year over year. Meanwhile, the Personal Lines unit recorded revenues of $924 million, which improved 12.7% year over year. The underlying combined ratio of 96.7% improved 500 bps year over year. The Group Benefits segment’s revenues grew 2.6% to $1.8 billion.
CNO Financial reported second-quarter adjusted earnings per share of $1.05, which beat the Zacks Consensus Estimate by 45.8%. Moreover, the bottom line rose 94.4% year over year. Total revenues increased 4.2% to $1.07 billion. The top line beat the consensus mark by 16.4%. Total insurance policy income of $641.5 million improved 2.1% year over year. CNO’s net investment income increased 2.4% year over year to $409.1 million.
General account assets grew 8.3% to $351.7 million and beat the consensus mark by 14.1%. However, the policyholder and other special-purpose portfolios declined 37.3% year over year to $57.4 million. Annuity collected premiums of $439.1 million increased 9.3% year over year. New annualized premiums for health and life products improved 4.3% to $102.9 million. Annuity, Health and Life products accounted for 27.7%, 49.4% and 22.9%, respectively, of CNO’s insurance margin.