Earnings Review and Free Research Report: Humana Reported Better Than Expected Earnings
Research Desk Line-up: Cigna Post Earnings Coverage
LONDON, UK / ACCESSWIRE / August 21, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Humana Inc. (NYSE: HUM), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=HUM, following the Company's posting of its financial results on August 02, 2017, for the second quarter fiscal 2017. The Company's adjusted revenue increased 2.4% on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Earnings Reviewed
For the three months ended June 30, 2017, Humana's revenue decreased 3.4% to $13.53 billion on a y-o-y basis from $14.01 billion in Q2 FY16. During Q2 FY17, the Company's adjusted revenue increased 2.4% to $13.29 billion on a y-o-y basis from $12.98 billion in the same quarter of last year. The revenue was below analysts' expectations of $13.61 billion.
During Q2 FY17, the Company's operating expenses decreased 140 basis points to 10.8% of revenue, from 12.2% of revenue in Q2 FY16. For the reported quarter, Humana's adjusted operating expenses decreased 130 basis points to 10.7% of revenue, from 12.0% of revenue in Q2 FY16.
For the reported quarter, Humana's earnings before interest and taxes (EBIT) increased 63.5% to $1.04 billion from $636 million in Q2 FY16. During Q2 FY17, the Company's adjusted EBIT increased 3.7% to $942 million from $908 million in Q2 FY16.
During Q2 FY17, Humana's diluted earnings per share (EPS) increased 116.5% on a y-o-y basis to $4.46 from $2.06 in Q2 FY16. For the reported quarter, the Company's adjusted diluted EPS increased 6.1% to $3.49 on a y-o-y basis from $3.29 in Q2 FY16. The adjusted diluted EPS surpassed analysts' expectations of $3.08.
On August 18, 2017, the Company's Board of Directors declared a cash dividend of $0.40 per share payable on October 27, 2017, to stockholders of record as of the close of business on September 29, 2017.
Segment Details
Retail - During Q2 FY17, Humana's Retail segment's revenue increased 3% to $11.30 billion from $10.96 billion in Q2 FY16. For the reported quarter, the segment's EBIT increased 18% to $607 million from $514 million in Q2 FY16. During Q2 FY17, the segment's adjusted EBIT increased 18% to $613 million from $520 million in Q2 FY16. During Q2 FY17, the segment's benefit ratio increased 50 basis points to 85.8% from 85.3% in Q2 FY16. The increase was primarily due to the impact of the temporary suspension of the health insurance industry fee in 2017.
Group and Specialty - During Q2 FY17, Humana's Group and Specialty segment's revenue decreased 2% to $1.83 billion from $1.87 billion in Q2 FY16. For the reported quarter, the segment's EBIT decreased 23% to $101 million from $124 million in Q2 FY16. During Q2 FY17, the segment's adjusted EBIT decreased 19% to $102 million from $126 million in Q2 FY16. During Q2 FY17, the segment's benefit ratio increased 100 basis points to 78.4% from 77.4% in Q2 FY16.
Healthcare Services - During Q2 FY17, Humana's Healthcare Services segment's revenue decreased 5% to $5.98 billion from $6.29 billion in Q2 FY16. For the reported quarter, the segment's EBIT decreased 3% to $270 million from $279 million in Q2 FY16. During Q2 FY17, the segment's adjusted EBIT decreased 3% to $281 million from $291 million in Q2 FY16.
Individual Commercial - During Q2 FY17, Humana's Individual Commercial segment's membership was 181,000 compared to 792,000 in Q2 FY16. For the reported quarter, the segment's EBIT was $118 million compared to a negative $225 million in Q2 FY16. During Q2 FY17, the segment's benefit ratio was 34.8% compared to 106.3% in Q2 FY16.
Balance Sheet
As on June 30, 2017, Humana's cash and short‐term investments increased 65% to $2.82 billion from $1.71 billion in Q1 FY17.
In H1 FY17, Humana's cash provided by operating activities was $4.10 billion compared to $206 million in H1 FY16. The increase was mainly due to receipt of the July Medicare premium payment from CMS. In H1 FY17, Humana's adjusted cash provided by operating activities was $1.05 billion compared to $206 million in H1 FY16.
During Q2 FY17, the Company's benefits ratio was 82.5% compared to 84.3% in Q2 FY16. For the reported quarter, Humana's adjusted benefits ratio increased 90 basis points to 83.4% from 82.5% in Q2 FY16.
For the reported quarter, Humana's Debt‐to‐total capitalization ratio was 31.3% from 33.9% in Q1 FY17.
Outlook
For FY17, Humana expects adjusted diluted EPS to be $17.83 and adjusted diluted EPS to be $11.50.
Stock Performance
Humana's share price finished last Friday's trading session at $247.28, marginally sliding 0.15%. A total volume of 753.86 thousand shares have exchanged hands. The Company's stock price soared 8.51% in the last three months, 20.86% in the past six months, and 37.78% in the previous twelve months. Additionally, the stock rallied 21.20% since the start of the year. Shares of the Company have a PE ratio of 20.18 and have a dividend yield of 0.56%. The stock currently has a market cap of $35.79 billion.
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