Humana (HUM) came out with quarterly earnings of $11.58 per share, beating the Zacks Consensus Estimate of $9.98 per share. This compares to earnings of $7.23 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 16.03%. A quarter ago, it was expected that this health insurer would post a loss of $2.24 per share when it actually produced a loss of $2.16, delivering a surprise of 3.57%.Over the last four quarters, the company has sur ...

Financial Data and Key Metrics Changes - The company reaffirmed its full-year guidance, indicating a strong start to 2025 with Q1 results ahead of expectations [7][14] - Adjusted EPS guidance for the year is approximately $16.25, with an expected insurance segment benefit ratio of 90.1% to 90.5% [15][14] - G&A costs for the quarter were slightly better than expectations, attributed to the timing of costs expected to be incurred in the second and third quarters [11][14] Business Line Data and Key Metrics Changes - No changes to membership guidance for 2025, with strong performance in the Open Enrollment Period (OEP) and a positive outlook for the rest of the year [9] - Significant progress in closing care gaps, with expectations to reduce gaps in care by 25% year over year and medication adherence campaigns showing a 30% to 50% reduction in members with weight refills [10][11] - CenterWell and Medicaid businesses are experiencing robust patient and membership growth, with 30 new centers added through acquisition and partnership [12][14] Market Data and Key Metrics Changes - The company is seeing strong year-to-date performance in markets with high concentrations of members, particularly in Florida, Illinois, and Texas [41] - Medicaid is performing in line with expectations, with approximately 100,000 growth year-to-date, aligning with the anticipated growth of 175,000 to 250,000 for the year [74][75] Company Strategy and Development Direction - The company is focused on operational efficiencies, increasing flexibility, and improving member outcomes while positioning for long-term success [14] - Emphasis on capital allocation and growth in CenterWell and Medicaid, with a focus on unlocking substantial value over the mid to long term [16][12] - The integration between the insurance segment and CenterWell is aimed at delivering better health outcomes and improving STARS performance [59][60] Management's Comments on Operating Environment and Future Outlook - Management noted that while challenges remain, there are no surprises in the external environment, and they are executing against controllable factors [7][8] - The company is optimistic about the underlying progress of the business, despite external regulatory headwinds [49][51] - Management expressed confidence in the ability to manage medical costs and G&A effectively while focusing on STARS outcomes [51][92] Other Important Information - The company is actively monitoring changes in consumer behavior due to the Inflation Reduction Act (IRA) [7] - Management highlighted the importance of the upcoming investor conference to provide clarity on earnings power and progress tracking [8][16] Q&A Session Summary Question: How much of your investments moved out of Q1? - Management indicated that most of the impact of incremental investments flowed through the MLR in Q1, with expectations for higher levels in the second through fourth quarters [19][20] Question: Update on the path to the 3% MA margin target? - Management reiterated focus on achieving a 3% margin, with timing tied to STARS outcomes, but no significant changes from previous communications [22][23] Question: Update on STARS initiatives and bids? - Management expressed confidence in progress made on STARS initiatives and ongoing bid processes, emphasizing a balanced approach to membership and margins [25][30] Question: Experience in Part D relative to expectations? - Trends in Part D are consistent with expectations, with mid-single-digit growth on the medical side and low double-digit growth on the pharmacy side [34][35] Question: Visibility on risk adjustment and Group MA? - Management reported strong membership changes and performance in Group MA, with no significant changes in behavior due to recent repricing activity [40][42] Question: Comments on Medicaid visibility and utilization? - Medicaid is performing in line with expectations, with strong growth and modest margin improvements anticipated [72][75] Question: Clarification on GAAP EPS and valuation adjustments? - Management clarified that the adjustment in GAAP EPS guidance is unrelated to structural impairment and is a complex calculation [88][94]

Financial Data and Key Metrics Changes - The company reaffirmed its full-year guidance, indicating a strong start to 2025 with Q1 results ahead of plan [5][14] - Adjusted EPS guidance for the year is approximately $16.25, with an expected insurance segment benefit ratio of 90.1% to 90.5% [15][14] - G&A costs for the quarter were slightly better than expectations, attributed to the timing of costs expected in the second and third quarters [11][14] Business Line Data and Key Metrics Changes - The Medicare product and experience maintained membership guidance for 2025, with strong performance in the Open Enrollment Period (OEP) [8] - CenterWell and Medicaid businesses showed robust patient and membership growth, with 30 new centers added through acquisition and partnership [12][14] - The company reported a 30% to 50% reduction year over year in members with weight refills due to medication adherence campaigns [11] Market Data and Key Metrics Changes - The company is seeing strong year-to-date performance in markets with high concentrations of members, particularly in Florida, Illinois, and Texas [41] - Medicaid membership growth is on track, with approximately 100,000 growth year-to-date, aligning with the expected annual growth of 175,000 to 250,000 [74] Company Strategy and Development Direction - The company is focused on operational efficiencies, increasing flexibility, and operating leverage while making investments to improve member outcomes [14] - The integration between the insurance segment and CenterWell is aimed at delivering better health outcomes and improving STARS performance [58][60] - The company is committed to returning to a 3% pre-tax margin in Medicare Advantage (MA) by 2027, with ongoing focus on quality and operational excellence [48][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying progress of the business despite external challenges, emphasizing control over medical costs and operational efficiencies [50][52] - The company is monitoring changes in consumer behavior due to the Inflation Reduction Act (IRA) and is prepared for potential impacts on future performance [6][14] - Management highlighted the importance of navigating regulatory headwinds while focusing on controllable factors [51][52] Other Important Information - The company is actively working through STARS strategy and bids, with a focus on balancing membership and margins [32][33] - Recent fulfillment agreements with multiple companies are expected to contribute positively to growth [12][63] Q&A Session Summary Question: How much of your investments moved out of Q1? - Management indicated that most of the impact of incremental investments flowed through the MLR in Q1, with expectations for higher levels in the second through fourth quarters [20] Question: Update on the path to the 3% MA margin target? - Management reiterated focus on achieving the 3% margin, with timing tied to STARS outcomes, and no significant changes from previous communications [23] Question: Update on STARS initiatives and bids? - Management expressed confidence in progress made on STARS initiatives and ongoing work on bids, emphasizing a balanced approach to membership and margins [27][32] Question: Experience in Part D relative to expectations? - Trends in the business are consistent with expectations, with mid-single-digit growth on the medical side and low double-digit growth on the pharmacy side [36] Question: Visibility on risk adjustment and Group MA? - Management reported strong membership changes and visibility into risk adjustment, with no significant behavioral changes noted in Group MA [41][43] Question: Comments on Medicaid visibility and utilization? - Medicaid is performing in line with expectations, with strong growth and positive trends in member engagement and outcomes [75][76] Question: Clarification on GAAP EPS and valuation adjustments? - Management clarified that the adjustment in GAAP EPS guidance is unrelated to structural impairment and is part of a complex calculation [93]

Financial Performance - 1Q25 earnings per share (EPS) reported at $10.30 (GAAP) and $11.58 (Adjusted) compared to $6.11 and $7.23 in 1Q24, representing a year-over-year increase of 68% and 60% respectively[3] - Consolidated revenues for 1Q25 reached $32,112 million, up from $29,611 million in 1Q24, reflecting a year-over-year growth of 8.5%[8] - Humana's consolidated revenues for Q1 2025 reached $32,112 million, up from $29,611 million in Q1 2024, reflecting an increase of 8.4%[40] - Humana Inc. reported a net income of $1,242 million for Q1 2025, up from $739 million in Q1 2024, representing a 68% increase[64] - Total revenues for Q1 2025 reached $32,112 million, compared to $29,611 million in Q1 2024, marking an increase of 8.5%[65][66] Insurance Segment Performance - The Insurance segment reported revenues of $30,937 million in 1Q25, an increase from $28,699 million in 1Q24, marking a growth of 7.7%[20] - The Insurance segment reported revenues of $30,937 million in Q1 2025, compared to $28,699 million in Q1 2024, marking a growth of 7.7%[40] - The Insurance segment's benefit ratio improved to 87.4% in Q1 2025 from 89.3% in Q1 2024, indicating better cost management[41] - Income from operations for the Insurance segment increased significantly to $1,574 million in Q1 2025, up from $898 million in Q1 2024, representing a growth of 75.2%[45] - The benefit ratio improved to 87.0% in Q1 2025 from 89.3% in Q1 2024, indicating better cost management in claims[65][66] Membership and Enrollment - Individual Medicare Advantage annual membership is expected to decline by approximately 550,000 due to exiting unprofitable plans and counties[3] - The total Medicare Advantage membership decreased to 5,788.4 thousand as of March 31, 2025, down 5.1% from 6,100.4 thousand a year earlier[67] - Humana expects to see growth of approximately 200,000 in Medicare stand-alone PDP membership[56] Operational Efficiency - The benefit ratio for the Insurance segment improved to 87.4% in 1Q25 from 89.3% in 1Q24, indicating enhanced operational efficiency[20] - Days in claims payable (DCP) decreased to 38.8 days in 1Q25 from 42.5 days in 1Q24, indicating improved claims processing efficiency[15] - Humana's operating cost ratio for Q1 2025 was 10.6%, slightly higher than 10.4% in Q1 2024, with adjusted (non-GAAP) figures showing 10.5% versus 10.2%[42] - Operating expenses for Q1 2025 were $30,098 million, an increase from $28,375 million in Q1 2024, reflecting a rise of 6.1%[66] Cash Flow and Capitalization - Operating cash flows decreased to $331 million in 1Q25 from $423 million in 1Q24, primarily due to unfavorable working capital items[17] - Humana's cash and cash equivalents at the end of Q1 2025 were $4,250 million, down from $5,910 million at the end of Q1 2024[64] - The company reported a significant increase in proceeds from the issuance of senior notes, totaling $1,481 million in Q1 2025 compared to $2,232 million in Q1 2024[64] - Debt-to-total capitalization improved to 42.8% in 1Q25 from 45.1% in 1Q24, reflecting a stronger balance sheet[8] Future Projections - Humana affirms its Adjusted FY 2025 EPS guidance at approximately $16.25 while revising GAAP EPS guidance to approximately $14.68 from $15.88[6] - Total revenues for 2025 are expected to be between $126 billion and $128 billion, with the insurance segment contributing $121 billion to $123 billion[56] - The CenterWell segment is projected to generate revenues between $20.5 billion and $21.5 billion[56] - The benefit ratio for the insurance segment is projected to be between 90.1% and 90.5%[56] - Operating cost ratio for consolidated operations is expected to be between 11.3% and 11.7%[56] - Cash flows from operations are projected to be between $2.4 billion and $2.9 billion[56] Segment Growth - The CenterWell segment revenues increased to $5,095 million in 1Q25 from $4,818 million in 1Q24, driven by growth in the primary care business[27] - The CenterWell segment's income from operations rose to $392 million in Q1 2025, compared to $282 million in Q1 2024, reflecting a growth of 39.1%[47] - The number of primary care patients served grew to 417,800 as of March 31, 2025, up from 318,000 a year earlier, indicating a year-over-year growth of 31.4%[72] - The total number of de novo primary care centers increased to 136 in Q1 2025, compared to 113 in Q1 2024, marking a growth of 20.4%[72] - The company aims to expand its market presence through new primary care centers and enhanced pharmacy solutions, focusing on improving patient engagement and care quality[77]

Core Viewpoint - Humana Inc. is expected to report strong first-quarter 2025 results, with earnings projected at $9.98 per share and revenues at $32.22 billion, indicating significant year-over-year growth [1][3]. Financial Performance - The first-quarter earnings estimate reflects a 38% year-over-year increase, while revenues are expected to grow by 9.8% [1]. - For the current year, Humana's revenue consensus estimate stands at $126.55 billion, representing an 8% year-over-year rise, and the EPS consensus is $16.36, indicating a growth of approximately 0.9% [3]. Earnings Expectations - Humana has consistently beaten earnings estimates in the past four quarters, with an average surprise of 15.4% [3]. - The company has a positive Earnings ESP of +0.57% and a Zacks Rank of 3 (Hold), suggesting a likelihood of an earnings beat this quarter [4]. Revenue Drivers - Revenue growth in Q1 is anticipated to be driven by higher premiums, with the consensus estimate for premiums at $30.7 billion, reflecting an 8.6% year-over-year increase [5]. - Revenues from Medicare stand-alone PDPs are expected to reach $1.7 billion, indicating a substantial year-over-year increase of 110.8% [5]. Membership Trends - Despite the expected revenue growth, total medical memberships are projected to decline by 3.8% year-over-year, primarily due to decreases in individual Medicare Advantage units and ASO commercial memberships [6]. Operating Expenses - Total operating expenses for the Insurance segment are estimated to grow by 7.6% year-over-year, attributed to higher operating costs [7].

Core Insights - Humana (HUM) is expected to report quarterly earnings of $9.98 per share, reflecting a 38% increase year over year, with revenues projected at $32.22 billion, a 9.8% increase from the previous year [1] - The consensus EPS estimate has been revised upward by 3.4% over the past 30 days, indicating analysts' positive reassessment of the company's performance [1][2] Revenue Estimates - Analysts estimate 'Revenues- Premiums' to be $30.68 billion, representing an 8.6% year-over-year increase [4] - 'Revenues- Services' are projected to reach $1.20 billion, indicating a 12.8% increase year over year [4] - 'Revenues- Investment income (loss)' is expected to be $275.11 million, reflecting a 4.5% decrease year over year [4] - 'Revenue- Insurance' is forecasted to be $31.15 billion, showing an 8.5% increase from the year-ago quarter [5] Membership Metrics - 'Medical Membership - Medicare stand-alone PDP' is expected to reach 2.45 million, up from 2.35 million in the same quarter last year [6] - 'Medical Membership- State-based contracts and other' is projected at 1.5 million, compared to 1.26 million in the previous year [6] - 'Medical Membership - Group Medicare Advantage' is estimated at 557.22 thousand, slightly up from 551.5 thousand year over year [7] - 'Medical Membership - Medicare Supplement' is forecasted at 375.88 thousand, an increase from 323.2 thousand in the previous year [7] - 'Medical Membership - Individual Medicare Advantage' is expected to be 5.2 million, down from 5.55 million year over year [7] - Total 'Medical Membership - Medicare' is projected to reach 8.21 million, down from 8.45 million in the previous year [8] - 'Medical Membership - Military services' is expected to be 5.32 million, down from 5.96 million in the same quarter last year [8] Stock Performance - Humana shares have shown a return of -0.1% over the past month, compared to a -4.3% change in the Zacks S&P 500 composite [9] - The company holds a Zacks Rank 3 (Hold), indicating expected performance in line with the overall market [9]

Company Overview - Humana (HUM) is expected to report quarterly earnings of $9.98 per share, reflecting a year-over-year increase of +38% [3] - Revenues are anticipated to reach $32.22 billion, which is a 9.8% increase from the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for April 30, 2025, and could influence stock movement based on whether actual results exceed or fall short of expectations [2] - The consensus EPS estimate has been revised 3.41% higher in the last 30 days, indicating a more optimistic outlook from analysts [4] Earnings Surprise Prediction - The Zacks Earnings ESP for Humana is +0.57%, suggesting a potential positive deviation from the consensus estimate [11] - However, Humana currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat [11] Historical Performance - In the last reported quarter, Humana was expected to post a loss of $2.24 per share but actually reported a loss of $2.16, resulting in a surprise of +3.57% [12] - Over the past four quarters, Humana has successfully beaten consensus EPS estimates four times [13] Industry Context - In the Zacks Medical - HMOs industry, Centene (CNC) is projected to report earnings of $2.36 per share, marking a year-over-year increase of +4.4% [17] - Centene's revenue is expected to be $43.47 billion, up 7.6% from the previous year [17] - The consensus EPS estimate for Centene has been revised 1.7% lower, but a higher Most Accurate Estimate results in an Earnings ESP of 8.17%, indicating a likely earnings beat [18]

Core Insights - The medical sector, particularly health insurance carriers, faced significant challenges in 2024 due to rising utilization costs associated with Medicare Advantage (MA) plans, which negatively impacted profits [1][2] - Despite the difficulties in 2024, health insurers are expected to perform well in 2025, benefiting from tariff-free status and recession resistance [2][3] Humana Inc. - Humana, the second-largest Medicare Advantage plan provider, experienced a stock decline of 46% in 2024, closing at $253.70 on December 31, 2024, but has seen an 11.3% increase year-to-date as of April 14, 2025 [2][3] - The company reported an EPS loss of $2.16 in Q4 2024, although revenues rose 10.4% year-over-year to $29.21 billion, surpassing consensus estimates [7] - Humana's adjusted benefits ratio increased by 120 basis points year-over-year to 91.9%, indicating rising costs [7][8] - The Centers for Medicare and Medicaid Services (CMS) raised MA reimbursement rates by 5.06% for 2026, resulting in an additional $26 billion for MA plan providers, with Humana set to benefit significantly [5][6] - However, Humana faces potential penalties of up to $2 billion due to a drop in Star Ratings, which could reduce net MA revenues to $3.4 billion [6][8] CVS Health - CVS Health has shown a turnaround, with stock prices increasing by 54% year-to-date as of April 14, 2025, and operates a more diversified business model compared to Humana [10][12] - The company reported an EPS of $1.19 in Q4 2024, beating consensus estimates, with revenues rising 4.2% year-over-year to $97.71 billion [13] - CVS Health's MA membership is expected to decline by high-single digits in unprofitable regions, but the 5.06% reimbursement rate increase could lead to an estimated $3 billion increase in 2026 reimbursements [12][17] - The Health Care Benefits segment reported an adjusted operating loss of $439 million, primarily due to higher MA utilization and lowered Star Ratings [13][14] - CVS Health's management aims to restore target margins of 3% to 5% in 2026, supported by the recent reimbursement increase [17]

UnitedHealth Group Incorporated (UNH) and Humana Inc. (HUM) are two of the most prominent players in the U.S. health insurance space. Both operate in the managed healthcare space, offering health plans, Medicare Advantage (MA) services and a broad range of healthcare solutions to millions of Americans.While both companies offer compelling narratives, one clearly stands out as the more attractive choice in today’s market.The Centers for Medicare & Medicaid Services (CMS) recently announced a 5.06% hike in MA ...

Company Overview - Humana (HUM) shares increased by 10.7% to $281.95 in the last trading session, with a higher-than-average trading volume [1] - The stock has gained 1.4% over the past four weeks [1] Revenue Drivers - The increase in Humana's stock price was primarily driven by the U.S. government's decision to raise Medicare Advantage payment rates by 5.06% for 2026, significantly higher than the initially proposed 2.23% increase [2] - This adjustment is projected to generate over $25 billion in additional revenue for insurers, benefiting companies like Humana [2] Earnings Expectations - Humana is expected to report quarterly earnings of $9.95 per share, reflecting a year-over-year increase of 37.6% [3] - Revenue for the upcoming quarter is anticipated to be $32.22 billion, which is a 9.8% increase compared to the same quarter last year [3] Market Sentiment - The consensus EPS estimate for Humana has remained unchanged over the last 30 days, indicating stability in earnings expectations [4] - The stock's price typically does not continue to rise without trends in earnings estimate revisions, suggesting that monitoring future earnings revisions will be crucial for assessing stock performance [4] Industry Context - Humana operates within the Zacks Medical - HMOs industry, which includes other companies like Select Medical (SEM) [4] - Select Medical's stock closed 0.6% higher at $15.75, but has seen a decline of 10% over the past month [4]