By Samiat Apr, 30, 2025 Featured

Humana Reports Strong Q1 2025 Earnings, Reaffirms Full-Year Guidance

Humana Inc. (HUM) delivered a solid first-quarter 2025 performance, beating Wall Street expectations on earnings despite a slight revenue miss. The company’s adjusted earnings per share (EPS) came in at $11.58, significantly higher than analyst forecasts of $10.09. Revenue for the quarter totaled $32.11 billion, just shy of the $32.15 billion consensus estimate.

The results sparked investor confidence, sending Humana stock up 5% in premarket trading on the day of the report.

Key Financial Highlights – Q1 2025

• Adjusted EPS: $11.58 (vs. $10.09 expected)

• Revenue: $32.11 billion (slightly below $32.15 billion expected)

• Medical Loss Ratio (MLR): Expected between 90.1% and 90.5% for full year

• Full-year guidance reaffirmed

Medicare Advantage Outlook & Operational Commentary

Humana, a major player in the Medicare Advantage market, stated that its medical loss ratio remains aligned with internal forecasts. Although the projected MLR is above the Affordable Care Act’s 85% minimum threshold, the company emphasized its confidence in pricing strategies and cost control measures.

CEO Jim Rechtin reassured investors during the earnings call, saying:

“While there are challenges to navigate, there are no surprises. We're managing well the factors within our control.”

This comes at a time when investors are closely monitoring Medicare Advantage providers following UnitedHealth Group's earnings miss earlier this month, which was tied to unexpected increases in Medicare-related costs. That news initially pulled down Humana stock by over 12%, though the latest earnings have helped restore some market confidence.

Star Ratings and Legal Challenge

Despite the earnings beat, Humana continues to face headwinds. The company lost more Medicare Advantage star ratings than any of its peers this year, which could reduce future Medicare reimbursement rates and lead to membership declines. In response, Humana is actively pursuing legal action over the rating methodology.

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