Insurance Giant Humana's Q4 Earnings: 13% Revenue Growth, 2025 Profit Outlook Falls Below Street View

On Tuesday, Humana Inc. HUM posted a fourth-quarter adjusted EPS loss of $(2.16), down from $(0.11) a year ago, in line with the consensus and including incremental investments in Stars.

The company reported revenues of $29.19 billion, up 13.5% year-over-year from $25.73 billion, beating the consensus of $28.84 billion, primarily driven by higher per-member Medicare premiums and Medicare Advantage and state-based contracts membership growth, offset by a decline in stand-alone PDP membership, and a decline in membership in the group commercial medical business as a result of the company’s decision to exit the business.

Also Read: RFK Jr. And Big Pharma: Health Secretary Hopeful Answers Pointed Questions On Drugs, Insurance, Trump Exec Orders

Humana ended the fourth quarter with 16.35 million in total medical membership, compared to 16.86 million a year ago. Individual Medicare Advantage membership reached 5.66 million, up from 5.67 million a year ago.

Humana says the insurance segment adjusted benefit ratio of 91.9%, which includes a 20-basis point increase related to incremental Star Ratings investments, was consistent with expectations.

Guidance: Humana expects 2025 GAAP sales of $126 billion-$128 billion versus the consensus of $119.41 billion.

Sales guidance includes Insurance segment sales of $121 billion—$123 billion and CenterWell segment sales of $20.5 billion—$21.5 billion.

The insurer expects individual Medicare Advantage annual membership decline of approximately 550,000, or approximately 10%, from 2024, inclusive of the company’s decision to exit certain unprofitable plans and counties, with group Medicare Advantage to remain relatively flat and Medicare stand-alone PDP growth of approximately 200,000.

Humana reaffirms the 2025 adjusted EPS outlook of $16.25 versus the consensus of $16.71.

For 2025, Humana expects its insurance segment’s benefit ratio guidance of approximately 90.1-90.5%.

In prepared remarks, Humana said, “Our 2025 MA pricing strategy was focused on resetting pricing and membership to more accurately reflect the funding and medical cost trend environment, improving underlying margins.”

Price Action: HUM stock is up 3.07% at $274.99 during the premarket session on last check on Tuesday.

Read Next:

• What To Expect When Biotech Giant Gilead Reports Q4 Earnings On Tuesday?

Photo: T. Schneider via Shutterstock