US health insurer Humana beat Wall Street estimates for second-quarter earnings, driven by strength across its insurance business and CenterWell healthcare services unit, as reported by industry analysts, while medical cost trends tracked in line with expectations.
On an adjusted basis, Humana earned $7.61 per share, while analysts estimated $7.22 per share, according to LSEG. The company posted net income of $694 million, or $5.73 per share, compared with $545 million, or $4.51 per share, in the year-ago quarter. Revenue climbed to $40.87 billion from $32.39 billion a year earlier.
Humana reported a quarterly medical cost ratio — the percentage of premiums spent on medical services — of 91.2%, in line with expectations. Analysts had expected a ratio of 91.19%, according to LSEG. In the year-earlier period, the ratio was 89.9%.
Humana CFO Celeste Mellet said medical cost expectations for next year are 'fairly consistent,' but added that pharmacy medical cost trends remain 'very elevated.' She also said Humana expects changes to its 2027 Medicare Advantage plans to help improve profitability and expressed confidence in boosting earnings through expanding membership, improving quality ratings, maintaining pricing discipline and controlling costs.
Humana left its annual adjusted profit forecast unchanged and maintained its 2026 adjusted profit outlook of at least $9 per share. Cantor Fitzgerald analysts called the unchanged profit outlook a 'disappointment.'
Humana shares fell in premarket trading following the report, with some sources citing a decline of about 9% and others more than 4%. Humana is one of the largest providers of US Medicare Advantage plans, serving people aged 65 and older and those with disabilities.