Reuters: Global Markets: Humana profit falls 21 percent, missing Street view

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Humana profit falls 21 percent, missing Street view Apr 30th 2012, 11:06 Mon Apr 30, 2012 7:06am EDT (Reuters) - Humana Inc (HUM.N) posted a 21 percent decline in quarterly profit on Monday, missing Wall Street's target, as higher medical benefit costs weighed on the health insurer's results. The first-quarter report from Humana, one of the largest providers of Medicare plans for the elderly, comes after rival insurers Aetna Inc (AET.N) and Coventry Health Care Inc (CVH.N) posted lower-than-expected profits last week. Humana's net income fell to $248 million, or $1.49 per share, compared with $315 million, or $1.86 per share, a year earlier. Analysts were expecting $1.53 per share. Humana said the earnings did top its expectations of $1.35 to $1.45. Revenue rose 11.2 percent to $10.22 billion, about $100 million ahead of estimates. The company spent 85.4 percent of premium revenue on medical benefits, up from 83.8 percent a year before. Profit fell 47 percent in Humana's retail segment, which includes its Medicare plans, primarily because of the higher medical benefit costs. Humana pointed to the extra day of claims because of the Leap Year, requirements due to the new U.S. healthcare overhaul law and the increased membership in its plans for the increase in health benefit costs. Membership in Humana's Medicare Advantage plans rose 18 percent to 1.88 million. Humana raised its 2012 earnings forecast to a range of $7.55 per share to $7.75 per share, an increase of 5 cents on both ends. Through Friday, Humana shares were up 0.2 percent this year, underperforming a nearly 9 percent rise for the Morgan Stanley Healthcare Payor index .HMO of health insurers. (Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn and Gerald E. McCormick) Link this Share this Digg this Email Reprints

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