Humana Clocks Around $1B In Quarterly Profit On Medicare Growth, Lower Costs

  • Humana Inc HUM reported Q3 adjusted EPS of $6.88, up from $4.83 a year ago, beating the consensus of $6.28.
  • Humana reported nearly $1.2 billion in third-quarter profits, mainly due to growth in its Medicare Advantage health plans and lower-than-expected medical expenses.
  • The company posted Q3 sales of $22.75 billion, beating the consensus of $22.69 billion.
  • Humana attributed the third quarter performance and lower benefits costs to “lower inpatient utilization associated with the individual Medicare Advantage business.”
  • The benefits expense ratio reduced to 85.6% from 87.1%, and the operating cost ratio increased from 12.2% to 12.2%. A lower ratio is better for a health insurer as it indicates a tight rein on costs.
  • Humana’s total Medicare Advantage enrollment was up 3.2% to 5.2 million at the end of the third quarter.
  • Guidance: Humana expects FY22 adjusted EPS of at least approximately $25.00. In September, Humana revealed an adjusted EPS target for FY 2025 of $37.
  • The company expects to enroll 325,000 to 400,000 people for its Medicare Advantage business next year.
  • Price Action: HUM shares are up 0.69% at $558.34 on the last check Thursday.
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