Humana (HUM) has adjusted its fiscal 2024 GAAP EPS guidance to approximately $12.81, down from the previous estimate of about $13.93. The company has upheld its adjusted EPS guidance at approximately $16.00. Additionally, Humana has revised its consolidated GAAP revenue forecast to approximately $116 billion, up from the prior guidance of about $113 billion. According to analysts surveyed by Thomson Reuters, the expected profit per share is around $16.31 with anticipated revenue of $114 billion. Analysts’ estimates often exclude special items.
In another update, Humana has increased its projected annual membership growth for individual Medicare Advantage in 2024 by 75,000, now expecting growth to reach around 225,000, or 4.2 percent. The company also reaffirmed its full-year Insurance segment benefit ratio guidance at approximately 90 percent, accommodating the higher net inpatient costs observed in the second quarter to persist throughout the year.
Looking ahead, Humana anticipates margin expansion and adjusted EPS growth in 2025. This marks the first step in a multi-year strategy towards achieving a normalized margin of at least 3 percent in the individual Medicare Advantage business.
For the second quarter, net income declined to $679 million from $959 million the previous year. Earnings per share decreased to $5.62 from $7.66, while adjusted earnings per share dropped to $6.96 from $8.94. Analysts had, on average, expected EPS to be $5.85, according to Thomson Reuters. The company attributed its outperformance to higher-than-anticipated revenue in the Medicare Advantage business, favorable claims development, and lower administrative expenses, some of which are considered timing-related.
Quarterly revenue increased by 10.4% to $29.54 billion, up from $26.75 billion last year. Adjusted revenues stood at $29.38 billion compared to $25.73 billion from the previous year. Analysts had, on average, estimated revenue of $28.51 billion.
Shares of Humana are down 7% in pre-market trading on Wednesday.
