Humana Inc. Earnings: Snaps Strong Streak with Profit Drop

S&P 500 (NYSE:SPY) component Humana Inc. (NYSE:HUM) reported its results for the first quarter. Humana 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 the medical-HMO fell to $248 million ($1.49 per share) vs. $315.2 million ($1.86 per share) a year earlier. This is a decline of 21.3% from the year-earlier quarter.

Revenue: Rose 11.2% to $10.22 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Humana Inc. fell short of the mean analyst estimate of $1.53 per share. Analysts were expecting revenue of $10.09 billion.

Quoting Management: “Our compelling senior value proposition and favorable demographics have made Humana one of the fastest growing Medicare Advantage and PDP companies in the nation,” said Michael B. McCallister, Humana’s Chairman of the Board and Chief Executive Officer. “This growth trajectory has contributed solidly to our results for the first quarter and our continued confidence in our projected results for the full year.”

Key Stats:

Last quarter’s profit decreases breaks a four-quarter run of profit increases. In the fourth quarter of the last fiscal year, net income rose 85.2% from the year earlier, while the figure increased 13.1% in the third quarter of the last fiscal year, 35.3% in the second quarter of the last fiscal year and 21.8% in the first quarter of the last fiscal year.

The company has fallen short of estimates for two consecutive quarters. In the fourth quarter of the last fiscal year, it missed expectations by 8 cents with net income of $1.12 versus a mean estimate of net income of $1.20 per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from $2.54 a share to $2.50 over the last thirty days. For the fiscal year, the average estimate has moved up from $7.82 a share to $8 over the last thirty days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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