Humana's Strong Quarter Fails To Impress

Humana Inc. (NYSE: HUM ) stock fell on Wednesday after the health insurer said it expects lower profits in fiscal 2026.

The company reported second-quarter adjusted income of $7.61 per share, up from $6.27 last year and above the consensus estimate of $7.22.

Humana reported sales of $40.89 billion, up from $32.39 billion a year ago, beating the consensus of $40.61 billion.

Medicare Advantage Membership Continues To Drive Growth At Humana The insurer ended the quarter with 17.91 million in total medical membership, up from 14.84 million a year ago.

Individual Medicare Advantage membership rose 23% to 6.45 million from 5.23 million a year earlier.

The total number of Medicare members was 11.13 million, up from 8.23 million the previous year.

Read Also: UnitedHealth Rally Sparks Bullish Case for Healthcare ETFs Despite Medicare Advantage Losses Operating Costs Improve As Efficiency Efforts Continue The insurance segment benefit ratio was 91.2%, consistent with expectations of slightly above 91%.

The adjusted consolidated operating cost ratio was 9.7%, while the Insurance segment operating cost ratio was 7.1%, each representing a 120-basis point (bps) reduction year over year.

The reduction was driven by operating leverage from membership and revenue growth, along with tactical cost-cutting and transformation efforts, which remain on track.

Humana Lowers GAAP Earnings Outlook While Maintaining Key 2026 Targets Humana affirmed fiscal 2026 adjusted earnings per share of at least $9, compared to the Wall Street estimate of $8.94.

The company lowered its GAAP EPS guidance to at least $6.52 from at least $8.36, compared to the consensus of $8.55.

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 continues to expect fiscal 2026 individual Medicare Advantage membership growth of approximately 25% over 2025.

The company expects Group Medicare Advantage growth of approximately 150,000 and Individual Medicare stand-alone PDP growth of roughly 1,000,000.

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.

Investors Wanted Bigger Guidance Increase Investor expectations for health insurers had risen after peers such as UnitedHealth Group Inc. (NYSE: UNH ) reported strong Medicare Advantage trends, improved cost management and raised their forecasts, leaving Humana’s modest earnings beat and unchanged full-year outlook short of expectations, Humana Price Action HUM Stock Price Activity: Humana shares were down 6.60% at $363.07 during premarket trading on Wednesday, according to Pro data.

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