On November 1, 2023, Humana Inc (HUM, Financial) released its third-quarter 2023 financial results. The company reported a GAAP EPS of $6.71 and an adjusted EPS of $7.78. The results reflect strong performance in Humana's Medicaid and Primary Care businesses, offset by slightly higher than anticipated utilization in the Medicare Advantage business.
Financial Highlights
Humana's Q3 2023 revenues were $26,423 million, a significant increase from $22,799 million in Q3 2022. The company's year-to-date (YTD) 2023 revenues were $79,912 million, up from $70,431 million in YTD 2022. The benefits expense ratio for Q3 2023 was 86.6%, slightly higher than the 85.6% in Q3 2022. The operating cost ratio for the same period was 12.5%, down from 13.5% in Q3 2022.
Humana's Insurance segment reported revenues of $25,511 million in Q3 2023, up from $21,743 million in Q3 2022. The benefits expense ratio for this segment was 87.6% in Q3 2023, slightly higher than the 85.8% in Q3 2022. The operating cost ratio for the same period was 10.4%, slightly lower than the 10.6% in Q3 2022.
CEO Commentary
“Our third quarter results reinforce Humana’s commitment to delivering strong earnings growth, especially considering the 19 percent increase in our individual Medicare Advantage membership which significantly outpaces the industry growth rate," said Bruce D. Broussard, Humana’s President and Chief Executive Officer. “Our results can be partially attributed to our team’s continued focus on advancing our CenterWell capabilities, driving durable productivity, and prioritizing quality. Our industry-leading Star Ratings for the sixth consecutive year, our strong Net Promoter Scores, and our numerous awards for customer experience are a testament to our commitment to the health, well-being, and satisfaction of our customers and to our being a trusted brand within the broker community. Our fundamentals are strong and we remain committed to our 2025 Adjusted EPS target of $37, reflecting a 14 percent compound annual growth rate from 2022 to 2025.”
Looking Ahead
Humana revised its GAAP EPS guidance for FY 2023 to 'at least $26.31', down from 'at least $26.91', while affirming its Adjusted EPS guidance of 'at least $28.25'. The company also raised its 2023 individual Medicare Advantage membership growth by 35,000 to 'approximately 860,000', indicating a 19 percent growth over FY 2022 ending membership.
Explore the complete 8-K earnings release (here) from Humana Inc for further details.
