Humana posts lower quarterly net income
Humana Inc. reported a 3.5 percent drop in fourth-quarter net income on Monday as the health insurer absorbed higher claims payments that offset continued growth in its lucrative Medicare Advantage membership.
The performance still surpassed Wall Street expectations. The company's new CEO said acquisitions and other investments made in the past year will position Humana for strong growth in coming years.
Looking ahead, Humana reaffirmed its 2013 earnings projection of between $7.60 and $7.80 per share.
Humana's fourth-quarter earnings were dragged by a higher percentage of premium dollars from its members that went to pay for medical claims in its key retail segment. As a result, pretax income in that segment fell $70 million from a year ago.
Humana reported net income of $192 million, or $1.19 per share, in the fourth quarter. That's down from $199 million, or $1.20 per share, a year ago. Analysts polled by FactSet expected earnings of $1.07 per share.
Revenue rose to nearly $9.6 billion from nearly $9.1 billion. Analysts expected $9.7 billion.
For the full year, Humana posted net income of $1.2 billion, or $7.47 per share, compared with $1.4 billion, or $8.46 per share, a year ago.
Last year, Humana acquired Metropolitan Health Networks Inc. in a deal aimed at strengthening its Medicare Advantage business, a government-subsidized comprehensive health insurance for seniors.
Metropolitan Health coordinates medical care for Medicare Advantage and Medicaid recipients.
In another late-year deal, Humana acquired Certify Data Systems, which through its health information exchange technology connects health care providers so they can share patient health information.