By Anna Wilde Mathews
Humana shares dipped roughly 4% in early trading, even though the insurer beat Wall Street expectations in its first-quarter results and stuck to its 2024 guidance.
The company yanked its guidance for 2025, leaving investors worried about the impact of lower-than-expected federal rates for its core Medicare Advantage business.
Humana sought to ease concerns about medical costs on a call with analysts Wednesday, saying they werent running ahead of its projections.Its medical-loss ratio, a closely watched measure of medical expenses, roughly matched analysts expectations.
For the fourth quarter, Humana had posted a loss and warned of higher-than-expected medical costs impacting its results into 2024 and beyond.
Humana suggested that the Medicare business would do well over the longer term, but warned of challenges and years of recovery before margins could stabilize at around 3% or higher. The company said it would update its 2025 outlook after it files its Medicare bids for next year.
Humanas first-quarter earnings come on the heels of results from competitors UnitedHealth and Elevance that had offered some relief for skittish managed-care investors worried about rising medical costs, regulatory pressure on the Medicare business and the impact of a cyberattack on UnitedHealths claims processor Change Healthcare.
For the first quarter, Humanas adjusted earnings per share of $7.23 beat the FactSet consensus of $6.12. Net income declined to $1.01 billion, or $6.11 a share, from $1.61 billion, or $9.87 a share, a year ago.
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(END) Dow Jones Newswires
April 24, 2024 10:20 ET (14:20 GMT)
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