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Humana reports sharply lower 3Q earnings

Humana reports sharply lower 3Q earnings

U.S. health insurer Humana Inc. said Monday its third-quarter profit tumbled nearly 40 percent, dragged down by a bitter dose of investment losses and an expected decline in premiums from its prescription drug plans.
The health insurer also lowered its earnings projections for the fourth quarter and full year.
In the three months ended Sept. 30, Humana earned $183 million, or $1.09 per share, down from $302.4 million, or $1.78 per share, in the year-ago period.
Latest-quarter results included a loss of 40 cents per share related to a downturn in the company's investment and securities lending portfolios and the sale of distressed financial institution securities. Excluding that loss, Humana said its earnings were $1.49 per share.
Quarterly revenue rose 13 percent to $7.15 billion from $6.32 billion a year ago.
Michael B. McCallister, Humana's president and chief executive, said "a relatively small portion of our investments were in financial institutions that are now in distress." Those losses did not affect operations and the company's financial position remains strong, he said.
Pretax earnings in Humana's government segment totaled $271.7 million, down from $416.3 million a year ago as a result of investment losses and previously announced lower operating results in its Medicare prescription drug plans.
Membership in Humana's Medicare Advantage plans, which offer comprehensive health coverage, grew to 1.37 million as of Sept. 30, an increase of 230,000 members, or 20 percent, from a year ago. Medicare Advantage premiums increased 24 percent to $3.5 billion for the just-ended quarter.
Membership in the company's stand-alone Medicare prescription drug plans totaled nearly 3.1 million at the end of the quarter, down from nearly 3.5 million a year ago. Premiums from those prescription plans fell 12 percent to $782.9 million in the quarter.
Meanwhile, pretax earnings for Humana's commercial segment plunged 82 percent to $11.2 million in the quarter, compared to $62.2 million a year ago. Humana said the decline was mainly due to $56.4 million in investment losses during the just-ended quarter, which more than offset improved operating results.
Commercial segment medical membership grew 8 percent to reach 3.55 million as of Sept. 30.
Humana cut its outlook to $1 to $1.10 per share for the fourth quarter and $3.80 to $3.90 per share for the full year on revenue of about $29 billion.


Updated : 2021-04-17 11:35 GMT+08:00