Humana Earnings Cheat Sheet: Tops Analyst Estimates, Shares Rise

S&P 500 (NYSE:SPY) component Humana Inc. (NYSE:HUM) reported net income above Wall Street’s expectations for the first quarter. Humana Inc. is a managed health care company that offers health and supplemental benefit products.

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Humana Earnings Cheat Sheet for the First Quarter

Results: Net income for Humana Inc. rose to $315.2 million ($1.86/share) vs. $258.8 million ($1.52/share) in the same quarter a year earlier. A rise of 21.8% from the year earlier quarter.

Revenue: Rose 8.9% to $9.19 billion YoY.

Actual vs. Wall St. Expectations: HUM beat the mean analyst estimate of $1.36/share. Estimates ranged from $1.16 per share to $1.87 per share.

Quoting Management: “Our favorable first-quarter results reflect operational discipline in our core businesses and a growing focus on a broader array of businesses designed to help people achieve lifelong well-being,” said Michael B. McCallister, Humana’s chairman of the board and chief executive officer. “Humana’s financial strength allows us to begin a more aggressive capital deployment program while still fully supporting the continued execution of our corporate strategy overall.”

On April 26, 2011, the company raised EPS guidance for the year ending December 31, 2011 (FY11) to a range of $6.70 to $6.90 versus its previous estimate of $5.95 to $6.15. This increase in FY11 EPS guidance primarily reflects favorable prior-period claims development in the first quarter, lower projected benefit expense ratios in the company’s Retail and Employer Group Segments and higher projected earnings for the company’s Health and Well-Being Services Segment.

Key Stats: Net income has increased 8.3% year over year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 30.4% from the year earlier quarter.

Competitors to Watch: CIGNA Corporation (NYSE:CI), WellPoint, Inc. (NYSE:WLP), UnitedHealth Group Inc. (NYSE:UNH), Universal American Corp. (NYSE:UAM), HealthSpring, Inc (NYSE:HS), Aetna Inc. (NYSE:AET), Molina Healthcare, Inc. (NYSE:MOH), Health Net, Inc. (NYSE:HNT), Triple-S Management Corp. (NYSE:GTS), and WellCare Health Plans, Inc. (NYSE:WCG)

Today’s Performance: Shares of HUM are trading at $76.99 as of May 2, 2011 at 8:02 AM ET, up over 1% from the previous close.


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