In This Article:
Health insurance provider Humana (HUM) outpaced first quarter adjusted earnings estimates, publishing a profit figure of $11.58 per share, while revenue fell just shy of forecasts for $32.15 billion.
Yahoo Finance senior health reporter Anjalee Khemlani analyzes Humana's earnings release, full-year guidance, and its position in the broader insurance landscape.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Shares of Humana opening the trading day, flipping around a little bit this morning, but up to the upside at the moment after reporting first quarter earnings that met Wall Street's expectations. Yahoo! Finance senior reporter, Angeli Camlani, has the details, Ange. Hey, that's right. Numbers are as good as expected as you mentioned from Wall Street. So take a look at what we've got. 32.11 billion in actual revenue compared to 32.15. So as you can see, really close on those numbers. And then adjusted EPS, a beat there, slightly so. And
And what that means really is that Humana's book of business is coming in in par with a lot of the changes that helped them sort of restart the new year on a different note, which includes moving out of certain areas where they offer the plans. And Medicare Advantage has been a really particular pain point for a lot of insurers in the last year. This clearly a change. We saw United Health, a little bit of pain. Elevance came out with a little less pain. And now Humana signaling that there might not be as much pain in the Medicare Advantage book this year based on a lot of different factors. We heard from Jeffrey's analysts saying Humana's results should be a calming influence. Its first quarter was largely uneventful and they did reaffirm guidance, so that's also more good news. I want to take a look at their MLR, that's their medical loss ratio. The Affordable Care Act basically ensured that insurers are supposed to spend a portion of the premiums that they receive, and that portion for large plans like Humana is around 85% that they're required to pay out. The good news is that they have exceeded that in this quarter, and they look to actually be on the higher side. Now, that 90.5 estimate, they mentioned in the call today that it is going to be because each quarter they do see sort of a little bit more increased expenses from plan members. So by the time they reach the end of the year, it should reach that 90.5. Good news for patients, bad news for investors who are looking for a lower number on that side always. But because the book of business is so heavily in that Medicare business, whatever costs happen, whatever, you know, senior utilization is like, that's something that Humana has to contend with. So all eyes on this one to see whether or not what we saw in United Health is going to be a continuing trend, clearly not as of right now. And then the last one that we're going to have to wait for is going to be next week with CVS and Aetna and to see if their book of business tells us what the actual story is.
Ange, thanks so much for breaking this down. Appreciate it. Thanks.