HUM - Humana stock trades lower despite Q4 beat; provides FY23 EPS outlook

Humana ( NYSE: HUM ) stock is trading slightly lower premarket on Wednesday despite Q4 results beat estimates.

Q4 adjusted EPS rose +30.6% Y/Y to $1.62, while revenue increased +6.6% Y/Y to $22.44B. Both top and bottom line surpassed analysts expectations.

Benefits expense ratio was 87.3%, compared to 87.9% in Q4 2021.

Full year 2022 revenue grew +11.8% Y/Y to $92.87B. Benefits expense ratio was 86.3%, compared to 86.7% in 2021.

"Humana is pleased to start the year in a position of strength, with robust 2023 individual Medicare Advantage (MA) membership growth expected to be at least 625,000 for the year, a year-over-year increase of 13.7 percent," said Humana's President and CEO Bruce Broussard.

During December 2022, Humana realigned certain of its businesses among its previously reportable segments, Retail, Group and Specialty and Healthcare Services, into two distinct segments: Insurance and CenterWell.

Revenue from Insurance segment grew +7.2% Y/Y to $21.60 in Q4. Benefits expense ratio was 87.5%, compared to 88.5% in Q4 2021.

CenterWell segment revenue increased +1.4% Y/Y to $4.14B.

Outlook 2023 :

Humana expects adjusted EPS of at least $28 ( consensus $28.01).

The company expects GAAP EPS to be at least $27.57. GAAP EPS for full year 2022 was $22.08.

"Looking ahead, we are confident in achieving our 2025 Adjusted EPS commitment of $37," added Broussard. Consensus for 2025 is $37.13.

HUM -0.39% to $509.69 premarket Feb. 1

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