Humana leaves annual adjusted profit outlook unchanged, shares drop
HUM•Quarterly results and membership growth
Humana said it saw a 23% rise in memberships in its individual Medicare Advantage plans in the quarter. It also reaffirmed its annual Medicare and Medicaid membership growth expectations.
Quarterly net revenue rose 26.2% to $40.87 billion, beating estimates of $40.61 billion.
It earned quarterly adjusted profit per share of $7.61, surpassing estimates of $7.22.
Humana keeps adjusted profit forecast unchanged
Humana stuck to its annual adjusted profit forecast on Wednesday for a second consecutive quarter, disappointing Wall Street and pushing the health insurer's shares down 8% in premarket trading.
Investors have been raising their expectations for insurers, after others including larger peer UnitedHealth raised their forecasts and did a better job at controlling costs.
Humana maintained its annual adjusted profit per share forecast of at least $9, but lowered its net profit forecast to at least $6.52 per share from the previous estimate of at least $8.36.
"Investors were probably hoping for a significant increase in expectations based on favorable Medicare Advantage trends so far in 2026, and they were disappointed when they did not get it," said Morningstar analyst Julie Utterback.
Medical cost ratio and Medicare Advantage trends
Humana is one of the largest providers of Medicare Advantage plans serving people aged 65 and older as well as people with disabilities.
The reaffirmed forecast overshadowed the insurer's second-quarter earnings beat as Humana's spend on medical services was in line with expectations.
Quarterly medical cost ratio, the percentage of premiums spent on medical care, stood at 91.2%, which was in line with Humana's expectations across both new and existing members. Analysts expected a ratio of 91.19%, according to data compiled by LSEG.
