HUM - Why Humana Stock Fell Today
2024-01-18 18:55:53 ET
Shares of Humana (NYSE: HUM) fell as much as 12.8% on Thursday after the health insurance company cut its 2023 guidance, citing rising Medicare Advantage costs amid "higher than anticipated inpatient utilization" in November and December.
In a surprise SEC filing this morning, Humana revealed that due to patients' higher inpatient utilization of Medicare Advantage late in the year, its fourth-quarter 2023 adjusted insurance segment benefit ratio -- or the percentage of payout on claims compared to its premiums -- should be around 91.4%, above the company's previous guidance for 89.5%. That would bring Humana's full-year adjusted insurance segment benefit ratio to 88%, above previous guidance for 87.5%.
On the bottom line, that should translate to generally accepted accounting principles ( GAAP ) earnings per share of $20, and adjusted (non-GAAP) earnings of $26.09 per share. By contrast, previous guidance provided in November called for GAAP earnings of "at least" $26.31 per share, and adjusted earnings of at least $28.25 per share.
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Why Humana Stock Fell Today