Humana Q4 Bottom-Line Beats Expectations, Plans Cost Savings

Humana Inc HUM posts Q4 adjusted sales of $21.19 billion, missing the consensus of $21.23 billion.

• The benefits expense ratio decreased from 88.3% to 87.9%, and the operating cost ratio declined from 16.3% to 15.9%. 
• Humana posted an adjusted EPS of $1.24, beating the consensus of $1.16 and a turnaround from a loss of $(2.30).
• The company says that FY21 earnings were impacted by the unmitigated COVID-19-related headwind of $1.00 EPS.
• Humana is committing to drive $1 billion of additional cost-saving, productivity initiatives for investment in Medicare Advantage business and further expansion of Healthcare Services capabilities.
• As a result, Humana anticipates that it will experience certain one-time restructuring charges in FY22 that will impact its GAAP results.
• Guidance: Humana expects FY22 GAAP EPS of at least $23.08, with adjusted EPS guidance of at least $24.00, versus the consensus of $23.85.
• Humana's EPS guidance contemplates an explicit COVID-19 related headwind of $1.00 per share.
• Price Action: HUM shares closed lower by 0.46% at $390.68 on Tuesday.