Humana Inc. (HUM) shares surged 10.88% on Wednesday after the health insurance giant reported better-than-expected second-quarter results and raised its full-year 2025 guidance. The company's strong performance and optimistic outlook demonstrated its ability to navigate the challenging healthcare landscape and manage costs effectively.

For the second quarter, Humana reported adjusted earnings per share of $6.27, surpassing analysts' expectations of $5.92. Revenue came in at $32.39 billion, also beating the estimated $31.89 billion. Notably, the company's medical cost ratio, a key metric in the insurance industry, stood at 89.7%, aligning with expectations and indicating effective cost management. In response to these strong results, Humana raised its full-year 2025 adjusted EPS guidance to approximately $17.00, up from its previous estimate of $16.25 and well above the consensus forecast of $16.36.

Investors were particularly encouraged by Humana's improved outlook for its Medicare Advantage business. The company now expects to lose up to 500,000 Medicare Advantage members in 2025, an improvement from its previous forecast of 550,000. Additionally, Humana increased its full-year revenue guidance to at least $128 billion, up from the previous range of $126-128 billion. These positive developments, along with the company's solid execution and results, have bolstered investor confidence in Humana's long-term growth prospects and its ability to compete effectively in the Medicare Advantage market.