Humana Inc. (NYSE:HUM) shares rose about 4% Friday after the health insurer posted a narrower-than-expected third-quarter loss, topped revenue estimates and raised its 2026 adjusted earnings guidance.
Humana reported an adjusted loss of 70 cents per share, beating the consensus loss estimate of $1, compared with adjusted earnings of $3.24 a year earlier. Revenue rose to $41.158 billion from $32.65 billion, beating the consensus of $40.89 billion.
Humana Raises 2026 Earnings Outlook
Humana raised its fiscal 2026 adjusted earnings per share guidance to at least $9.50, above the Wall Street estimate of $9.15 and prior guidance of at least $9.
The company also raised its GAAP EPS guidance to at least $15.09 from at least $6.52.
The company reaffirmed its insurance segment benefit-ratio outlook of 92.75%, plus or minus 25 basis points, and its consolidated operating cost-ratio outlook of 10%, plus or minus 25 basis points.
Humana expects 2026 sales of at least $160 billion, including insurance segment sales of at least $155 billion, and CenterWell segment revenues of at least $25 billion. That revenue outlook is below the analyst estimate of $162.64 billion.
Medicare Advantage Membership Surges
The insurer ended the quarter with 18.04 million in total medical membership, up from 14.99 million a year ago.
Individual Medicare Advantage membership rose to 6.46 million from 5.24 million a year earlier. The total number of Medicare members was 11.21 million, up from 8.25 million the previous year.
Benefit Ratio Beats Guidance as Operating Costs Fall
The insurance segment benefit ratio was 93.7%, better than management’s guidance of slightly above 94%.
The adjusted consolidated operating cost ratio was 10.3%, and the insurance segment operating cost ratio was 7.4%, a 110-basis-point reduction year over year, driven by operating leverage from membership and revenue growth, along with cost-cutting and transformation efforts.
Humana said that, based on information available to date, medical and pharmacy cost trends are in line with, or better than, expectations of a ‘high single-digit’ trend, across both new and existing membership.
2027 Medicare Bids Target 2028 Margin Goal
In an executive summary, the company said it continues to expect that its approach to 2027 individual Medicare Advantage (MA) bids “will drive meaningful progress against our commitment of returning to a sustainable pre-tax margin of at least 3% in 2028.”
The company added that it believes it is “well positioned to deliver on our commitment of unlocking the earnings potential of the business by 2028.”
HUM Price Action: Humana shares were up 3.98% at $428.17 at the time of publication on Friday, according to Benzinga Pro data.
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