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Humana Inc. HUM reported second-quarter 2025 adjusted earnings of $6.27 per share, which missed the Zacks Consensus Estimate by 0.8%. The bottom line decreased 9.9% year over year.
Adjusted revenues of $32.4 billion advanced 10.2% year over year. The top line beat the consensus mark by 1.9%.
The quarterly results suffered a blow from an elevated expense level, dragging net income. A decline in individual Medicare Advantage membership also led to the downside. Nevertheless, the downside was partly offset by the strong performance of the CenterWell unit on the back of strong pharmacy and primary care businesses.
Humana Inc. price-consensus-eps-surprise-chart | Humana Inc. Quote
Humana’s premiums improved 9.1% year over year to $30.7 billion, higher than the Zacks Consensus Estimate of $30.2 billion and our estimate of $30.1 billion. Services revenues of $1.4 billion climbed 27.3% year over year and beat the consensus mark of $1.31 billion and our estimate of $1.33 billion.
Investment income came in at $272 million, which slipped 8.7% year over year. The metric beat the consensus estimate of $271 million but fell short of our estimate of $285.6 million.
The benefit ratio deteriorated 70 basis points (bps) year over year to 89.7% in the second quarter due to expansion of state-based contracts and stand-alone PDP businesses that carry a higher benefit ratio. A decline in individual Medicare Advantage membership also affected the metric.
Total operating expenses of $31.3 billion escalated 10.2% year over year, higher than our estimate of $29.9 billion. The year-over-year increase was due to higher benefits and operating costs. Operating cost ratio deteriorated 20 bps year over year to 11%.
HUM’s net income totaled $543 million in the quarter under review, which plunged 19.9% year over year.
The segment recorded adjusted revenues of $31.1 billion in the second quarter, which improved 9.6% year over year, resulting from improved per-member Medicare premiums coupled with an expanding customer base in stand-alone prescription drug plans and state-based contract businesses.
Adjusted operating income fell 6.8% year over year to $770 million. Adjusted benefit ratio of 89.9% deteriorated 50 bps year over year. Adjusted operating cost ratio improved 10 bps year over year to 8.3%.
Total medical membership of the segment was 14.8 million as of June 30, 2025, which tumbled 9% year over year. The metric lagged the Zacks Consensus Estimate of 15.4 million and our estimate of 15.9 million.
Revenues in the unit advanced 11.9% year over year to $5.5 billion in the quarter under review, which outpaced the Zacks Consensus Estimate of $5.2 billion and our estimate of $5.1 billion. The metric benefited on the back of higher revenues stemming from the company’s pharmacy and primary care businesses.
Adjusted operating income was $404 million, which increased 2.5% year over year. The operating cost ratio deteriorated 70 bps year over year to 92.7%.
Humana exited the second quarter with cash and cash equivalents of $4 billion, which surged 81.9% from the 2024-end level. Total assets of $50.4 billion increased 8.3% from the figure at 2024-end.
Long-term debt amounted to $12.6 billion, up 12.9% from the figure as of Dec. 31, 2024. Debt to capitalization improved 290 bps year over year to 40.7% at the second-quarter end.
Total stockholders’ equity of $18.2 billion improved 11.4% from the figure at 2024-end.
HUM generated net cash from operations of $1.6 billion in the first half of 2025, which dipped 2.1% from the prior-year comparable period.
Humana bought back shares worth $109 million in the first half of 2025. It also paid dividends of $214 million during the same time frame. As of July 29, 2025, HUM had a share buyback capacity of $2.83 billion.
Adjusted earnings per share (EPS) are currently forecasted at around $17.00, up from the earlier view of around $16.25. The revised outlook indicates a 4.9% rise from the 2024 figure. GAAP EPS is projected to be roughly $13.77, down from the earlier view of around $14.68.
Revenues are presently estimated to be a minimum of $128 billion compared with the prior view of $126-$128 billion. The updated guidance implies a 8.7% increase from the 2024 figure. The Insurance segment’s revenues are forecasted at a minimum of $123 billion compared with the earlier guidance of $121-$123 billion. Revenues of the CenterWell segment are expected at a minimum of $21.5 billion compared with the prior outlook of $20.5-$21.5 billion.
Management anticipates Individual Medicare Advantage membership to witness a decline of "up to 500,000" in 2025, while the earlier view called for metric to record a decrease of around 550,000. Group Medicare Advantage membership is still expected to stay relatively flat from the 2024-end figure.
Membership from the Medicare stand-alone PDP is reiterated to increase around 200,000 this year. State-based contracts are still expected to witness membership growth within 175,000-250,000.
The benefit ratio of the Insurance unit continues to be projected between 90.1% and 90.5% for 2025. The consolidated GAAP operating cost ratio continues to be anticipated within the band of 11.3-11.7%.
GAAP cash flow from operations continues to be estimated within $2.4 billion and $2.9 billion. Meanwhile, capital expenditures are still projected to be roughly $650 million.
The effective tax rate is still expected at around 25% while the weighted average share count is presently anticipated at around 121 million.
Humana currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Of the Medical sector players that have reported second-quarter 2025 results so far, the bottom-line results of Tenet Healthcare Corporation THC, HCA Healthcare, Inc. HCA and The Ensign Group, Inc. ENSG beat the respective Zacks Consensus Estimate.
Tenet Healthcare reported second-quarter 2025 adjusted EPS of $4.02, which surpassed the Zacks Consensus Estimate by 41.6%. The bottom line soared 74% year over year. Net operating revenues advanced 3.2% year over year to $5.3 billion. The top line beat the consensus mark by 2.4%. Adjusted net income of $369 million climbed 63.3% year over year in the quarter under review. Adjusted EBITDA improved 18.6% year over year to $1.1 billion.
The Hospital Operations and Services segment recorded net operating revenues of $4 billion, which inched up 0.9% year over year. Adjusted EBITDA climbed 25.1% year over year to $623 million. Adjusted EBITDA margin of 15.6% improved 300 bps year over year. The Ambulatory Care segment’s net operating revenues rose 11.3% year over year to $1.3 billion. Adjusted EBITDA was $498 million, which advanced 11.4% year over year.
HCA Healthcare’s second-quarter 2025 adjusted EPS of $6.84 surpassed the Zacks Consensus Estimate by 10.5%. The bottom line improved 24.4% year over year. Revenues were $18.6 billion, which advanced 6.4% year over year. The top line beat the consensus mark by 0.7%. Same-facility equivalent admissions grew 1.7% year over year in the second quarter, while same-facility admissions increased 1.8% year over year.
Same-facility revenue per equivalent admission advanced 4% year over year. Same-facility inpatient surgeries dipped 0.3% year over year. Same-facility outpatient surgeries slipped 0.6% year over year. Additionally, same-facility emergency room visits inched up 1.3% year over year in the quarter under review. Adjusted EBITDA improved 8.4% year over year to $3.8 billion, which beat our estimate of $3.6 billion. HCA Healthcare operated 191 hospitals and roughly 2,500 ambulatory sites of care across 20 states and the United Kingdom as of June 30, 2025.
Ensign Group reported second-quarter 2025 adjusted EPS of $1.59, which beat the Zacks Consensus Estimate by 3.3%. The bottom line improved 20.5% year over year. Operating revenues advanced 18.5% year over year to $1.2 billion. The top line surpassed the consensus mark by 1.8%. Ensign Group’s adjusted net income of $93.3 million rose 22.1% year over year in the quarter under review.
Same-facilities occupancy improved 160 bps while transitioning-facilities occupancy increased 370 bps year over year. The Skilled Services segment’s revenues were $1.17 billion in the second quarter, which grew 18.4% year over year. Segment income of $150 million advanced 22.8% year over year. In the Standard Bearer unit, rental revenues climbed 34.7% year over year to $31.5 million in the quarter under review. Funds from operations were $18.4 million, which increased 26.6% year over year.
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This article originally published on Zacks Investment Research (zacks.com).
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