LOUISVILLE, KY – Humana Inc., one of the largest providers of Medicare Advantage plans in the country, this morning reported higher earnings in the fourth quarter and fiscal year 2011 compared to 2010.
Fourth quarter earnings totaled $313 million or $1.20 per share and full year earnings of more than $2.2 billion or $8.46 per share. Both figures were in line with analysts' estimates compiled by Thomson Financial Services. The results compare favorably with 2010 operating results, when Humana reported $174 million in fourth quarter earnings (63 cents per share) and $1.75 billion ($6.47 per share) for FY 2010.
“Humana reported a relatively solid 4Q11…although not crushing expectations as the company did during the first three quarters of the year,” commented Jason Gurda, research analyst with Leerink Swan in a reasearch note. “Revenue came in light of estimates, partially due to rebates for minimum MLR requirements.”
The company also released its outlook for 2012 and raised its earnings target to a range of $7.50 to $7.70, up from previous company guidance of $7.40 to $7.50, Humana officials attributed the bumped forecast to a growth in its Medicare Advantage plans coming in at 40,000 more than initially expected.
While the company’s guidance was higher than its earlier estimates, it was nonetheless below analysts’ average estimates for FY 2102 of $7.99. Early trading on the New York Stock Exchange has investors punishing the stock, down nearly five percent in early trading.
But while the Humana shares were getting a modest haircut today, sentiment on the Street for the company remains bullish, as it has for the past year, during which the company has seen its shared price soar by roughly 50 percent.
Many analysts consider Humana’s position in the Medicare Advantage insurance market to be a key to the company’s continued prospects and growth – a sentiment that is echoed by company management.
“Humana’s ongoing operating discipline and attractive Medicare value proposition bode well for a future of favorable senior demographics and the growing need to rein in national health-care spending – especially in Medicare,” said Michael B. McCallister, Humana’s chairman of the board and CEO in a press release. “For 2012, we see further growth opportunities in Medicare and, more broadly, in our continuing expansion into adjacencies related to lifelong well-being.”
