Driven by increased premiums and services revenue, Humana (NYSE:HUM) revealed a stronger-than-expected 18% rise in second-quarter profit on Wednesday and raised its full-year outlook.
The Louisville, Ky.-based health insurer, which focuses on private Medicare plans, reported net income of $420 million, or $2.63 a share, compared with a year-earlier profit of $356 million, or $2.16.
Excluding the 12 cents Humana recorded as special items, the results topped average analyst estimates of $2.47 a share in a Thomson Reuters poll.
Revenue for the three months ended June 30 was $9.7 billion, up 6.4% from $9.2 billion a year ago, narrowly below the Street’s view of $10.3 billion. Humana recorded a 7.1% increase in Medicare Advantage membership, while premiums in the group edged up 5.8%.
In a statement, Humana CEO Bruce Broussard attributed the performance to “continued focus and executional discipline,” as well as in key initiatives like its chronic care program.
Humana raised its full-year EPS guidance to a range of $8.65 to $8.75 from an earlier $8.40 to $8.60. The guidance is mostly above the consensus view of $8.68.
Building on the successes from last quarter and a focus on axing costs, Broussard said Humana will be well positioned to face reform-related challenges set to hit in 2014.
The insurer is the fourth major health-services provider to report earnings this season. Rivals UnitedHealth (NYSE:UNH), WellPoint (NYSE:WLP) and Aetna (NYSE:AET) all posted favorable profits as members used fewer services.
Shares of Humana were up 3.8% to $92.65 in morning trade.