Key Takeaways
- Humana beat first-quarter profit and sales estimates as it reduced costs and exited some Medicare Advantage plans.
- The insurer posted a membership decline, which is said was mostly because it pulled out of what it called “unprofitable” Medicare Advantage plans and counties.
- Humana lowered the ratio for what it paid for claims compared to premiums.
Humana (HUM) shares edged higher when the health insurer reported better-than-expected results as it lowered costs and pulled out of certain Medicare Advantage plans.
Humana posted first-quarter adjusted earnings per share of $11.58, well above the $10.05 average estimate of analysts surveyed by Visible Alpha. Revenue rose 8% year-over-year to $32.11 billion, also more than forecast.
The company said its year-to-date membership declined 446,000, which was in-line with its expectations. It noted that the losses were “largely driven by our decision to exit certain unprofitable plans and counties, which impacted approximately 560,000 members.”
Humana added that the insurance segment benefit ratio, which measures how much an insurer pays in claims compared to premiums, dropped to 87.4% from 89.3%, and was in line with its prior expectation.
Humana affirmed its full-year adjusted EPS outlook of approximately $16.25, but lowered its GAAP EPS guidance to about $14.68 from roughly $15.88.
Including today’s slight gains, shares of Humana are up 2.5% for 2025.
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