Humana beats 3Q profit forecasts, hikes 2017 outlook
Humana beat third-quarter earnings expectations and raised its 2017 forecast, but job cuts and an early retirement program took a bite out of the health insurer's bottom line.
Company shares jumped in early trading Wednesday, after the insurer detailed results.
Humana said that it now expects 2017 adjusted earnings of about $11.60, up a dime from a forecast it made in August.
Analysts expect earnings of $11.55 per share, on average, according to FactSet.
In the third quarter, Humana's net income jumped 11 percent to $499 million. Adjusted earnings totaled $3.39 per share, while revenue excluding investment income came to $13.18 billion.
Analysts expected, on average, earnings of $3.27 per share on $13.29 billion in revenue, according to Zacks Investment Research.
The insurer booked a $124-million expense before taxes for starting an early retirement program and cutting about 1,300 positions. Combined, the moves affect about 5.7 percent of its workforce.
Humana is one of the nation's biggest providers of Medicare Advantage coverage, which involves privately run versions of the federal Medicare program for people who are over 65 or disabled. The insurer covered nearly 3.3 million people through either group or individual Medicare Advantage plans in the third quarter.
Shares of Louisville, Kentucky-based Humana Inc. climbed more than 2 percent, or $6.69, to $263 before markets opened.
The stock price has grown more than 26 percent since the beginning of the year, while the Standard & Poor's 500 index has increased 16 percent.
Elements of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on HUM at https://www.zacks.com/ap/HUM