Humana (NYSE: HUM) revealed stronger-than-expected third quarter earnings and lifted its fiscal view on Monday as the company’s attempts to add value to its Medicare Advantage program started to pay off through increased membership.
Reflecting higher Medicare membership and lower projected benefit expense ratios, the company lifted its fiscal earnings view for the year ending Dec. 31 to the range of $8.35 to $8.40 a share, up from its earlier view of $7.50 to $7.60 a share.
Analysts polled by Thomson Reuters are predicting fiscal 2011 earnings of just $7.65 a share.
For fiscal 2012, Humana revealed a lower year-over-year fiscal view of $7.40 to $7.60 a share, which is below the Street’s current view of $7.79 a share.
The Louisville, Ky.-based health care provider reported net income of $444.76 million, or $2.67 a share, compared with $393.2 million, or $2.32 a share, in the same quarter last year, ahead of average analyst estimates polled by Thomson Reuters of $2.02.
Revenue for the three months ended Sept. 30 $9.3 billion up 11.4% $8.35 billion, beating the Street’s view of $9.25 billion. Premiums and services in its retail segment grew 13% to $5.4 billion.
“Our favorable results in the third quarter and year to date reflect strong operating performance across multiple businesses,” the company’s chief executive Michael McCallister said in a statement.
The company continues to focus on building its Medicare Advantage premiums and benefits and stand-alone prescription drug offerings. Because of that, Humana predicts there will be further membership gains in its Medicare offerings, which now covers 4.5 million people, through the coming year.
During the quarter, the company added 151,200 members, an increase of 10%, to its Medicare Advantage program. Membership to its stand-alone prescription drug plans climbed 47% year over year.