Health insurer Humana Inc. (HUM) reported higher first-quarter earnings of $473 million, or $2.95 per share, compared with $248 million, or $1.49 per share, last year. On average, 19 analysts polled by Thomson Reuters expected earnings per share of $1.81 for the quarter. Analysts' estimates typically exclude one-time items.
The latest quarter's results exceeded prior expectations of $1.75 - $1.85, due mainly to outperformance across the company's portfolio of businesses as well as the beneficial effect of certain discrete items and a lower-than-projected tax rate, according to Humana.
Three-month consolidated revenues were $10.49 billion, up 2.6 percent from $10.22 billion a year back, while 15 analysts estimated revenues of $10.25 billion. Total premiums and services revenue also went up 2.6 percent year-over-year. The growth in premiums and services revenue was chiefly driven by higher Retail and Employer Group segment revenues resulting from higher average individual and group Medicare membership, partially offset by the company's new South Region TRICARE contract being accounted for as self-funded versus fully-insured for the previous contract, the company added.
For the second quarter, earnings per share is anticipated to lie between $2.40 and $2.50, whereas 18 analysts project earnings of $2.30 per share.
Looking ahead to fiscal 2013, the company now sees earnings per share of $8.40 - $8.60, versus its prior range of $7.60 - $7.80, reflecting the better-than-expected first quarter results partially offset by higher-than-earlier projected investment spending for its integrated care delivery model and health care exchanges in the latter half of 2013. Twenty-two analysts project annual earnings of $7.98 per share.
Full-year consolidated revenues are projected between $41.0 billion and $41.5 billion, while 14 analysts estimate revenue of $41.13 billion for 2013.
Humana's Chief Executive noted: "On the immediate horizon, while the final 2014 Medicare rate notice remedied some aspects of the major reduction that was initially proposed, funding challenges continue, making 2014 earnings growth uncertain at this time."
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