Humana Q1 Earnings Miss Expectations

Humana Inc (NYSE: HUM) reported weaker-than-expected earnings for the first quarter, but the company's revenue exceeded analysts' estimates. The company also reaffirmed its guidance for the full year.The Louisville, Kentucky-based company posted quarterly earnings of $430 million, or $2.82 per share, versus a year-ago profit of $368 million, or $2.35 per share. Excluding items, the company earned $2.47 per share.Its revenue climbed 18.1 percent to $13.83 billion. However, analysts were expecting earnings of $2.56 per share on revenue of $13.51 billion.The average estimate among 14 Estimize users was for earnings of $2.56 per share and revenue of $13.5 billion.Premiums revenue climbed 19.5 percent to $13.25 billion, while services revenue shrank 8.9 percent to $490 million.In the company's retail operations, membership rose 19.8 percent. Group membership slipped 7.9 percent to 5 million.Its operating expenses increased 18.7 percent to $13.04 billion.Medical benefit ratio rose by 80 basis points to 83.1 percent in the quarter. Benefits expenses climbed 20.6 percent to $11 billion.At March 31, 2015, Humana had $11.52 billion in cash, cash equivalents, and investment securities, versus $11.48 billion at December 31, 2014."Our first-quarter achievements included substantial revenue and membership growth, announcement of the launch of our population health technology business, Transcend Insights, the pending sale of Concentra, and the completion of our accelerated share repurchase program, as well as strong pretax income," said Bruce D. Broussard, Humana's President and Chief Executive Officer. "These achievements contributed meaningfully to the advancement of our integrated care delivery model with its data-driven focus on the consumer, powered by our disciplined approach to capital allocation – which, taken together, represents a sustainable competitive advantage for Humana."Humana shares fell 6.16 percent to $169.95 at 10:45 a.m. ET.