LOUISVILLE, Ky. (AP) -- Humana Inc. looks to close out a strong year when the health insurer reports fourth-quarter earnings before the markets open Monday. Some competitors already have reported mixed results amid signs that health care use is picking up.
WHAT TO WATCH FOR: Humana has benefited from solid gains in its Medicare Advantage enrollment, spurring higher profits in the first three quarters of 2011. Another factor behind the company's surge in profit has been slower growth in health care claims. The economic slowdown spurred consumers to scale back on their use of care, but rivals WellPoint Inc. and UnitedHealth Group Inc. recently pointed to an uptick in health care use in reporting fourth-quarter results.
Humana is a key player in the Medicare Advantage business, and Medicare accounts for more than half its revenue.
Medicare Advantage plans are privately run versions of the government's Medicare program. Subsidized by the government, the plans offer basic Medicare coverage topped with extras like vision or dental coverage for premiums lower than standard Medicare rates. The company said individual Medicare Advantage membership rose 10 percent in the third quarter compared with the year-ago period.
Goldman Sachs analyst Matthew Borsch has been among those upbeat about prospects for the managed-care business.
"Longer term, the outlook for managed care penetration of Medicare and Medicaid helps to support a robust growth outlook for managed care," Borsch wrote in a recent note.
Humana has continued to look for expansion opportunities in health care delivery. In November, the company said it is acquiring SeniorBridge, a New York-based chronic-care provider best known for offering in-home care for the elderly.
WHY IT MATTERS: Louisville-based Humana is one of the nation's largest publicly traded health insurers. It's also one of the largest players in the Medicare Advantage segment, which has a growth rate that's outpacing commercial insurance as baby boomers become eligible for the coverage.
WHAT'S EXPECTED: Analysts surveyed by FactSet forecast, on average, earnings of $1.21 per share on $9.26 billion in revenue from Humana.
LAST YEAR'S QUARTER: Humana earned $107.3 million, or 63 cents per share, in the fourth quarter of 2010, on revenue of $8.35 billion. Those earnings fell 57 percent as operations were weighed down by expenses partly associated with its Medicare offerings and its purchase of Concentra Inc., which provides occupational medicine, urgent care, physical therapy and wellness services.
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