Humana Inc. (NYSE:HUM) stock fell on Wednesday after the health insurer said it expects lower profits in fiscal 2026.

The company reported second-quarter adjusted income of $7.61 per share, up from $6.27 last year and above the consensus estimate of $7.22.

Humana reported sales of $40.89 billion, up from $32.39 billion a year ago, beating the consensus of $40.61 billion.

Medicare Advantage Membership Continues To Drive Growth At Humana

The insurer ended the quarter with 17.91 million in total medical membership, up from 14.84 million a year ago.

Individual Medicare Advantage membership rose 23% to 6.45 million from 5.23 million a year earlier.

The total number of Medicare members was 11.13 million, up from 8.23 million the previous year.

Operating Costs Improve As Efficiency Efforts Continue

The insurance segment benefit ratio was 91.2%, consistent with expectations of slightly above 91%.

The adjusted consolidated operating cost ratio was 9.7%, while the Insurance segment operating cost ratio was 7.1%, each representing a 120-basis point (bps) reduction year over year.

The reduction was driven by operating leverage from membership and revenue growth, along with tactical cost-cutting and transformation efforts, which remain on track.

Humana Lowers GAAP Earnings Outlook While Maintaining Key 2026 Targets

Humana affirmed fiscal 2026 adjusted earnings per share of at least $9, compared to the Wall Street estimate of $8.94.

The company lowered its GAAP EPS guidance to at least $6.52 from at least $8.36, compared to the consensus of $8.55.

The company reaffirmed its Insurance segment benefit-ratio outlook of 92.75%, plus or minus 25 basis points, and its consolidated operating cost-ratio outlook of 10%, plus or minus 25 basis points.

Humana continues to expect fiscal 2026 individual Medicare Advantage membership growth of approximately 25% over 2025.

The company expects Group Medicare Advantage growth of approximately 150,000 and Individual Medicare stand-alone PDP growth of roughly 1,000,000.

Humana expects 2026 sales of at least $160 billion, including insurance segment sales of at least $155 billion, and CenterWell segment revenues of at least $25 billion.

Investors Wanted Bigger Guidance Increase

Investor expectations for health insurers had risen after peers such as UnitedHealth Group Inc. (NYSE:UNH) reported strong Medicare Advantage trends, improved cost management and raised their forecasts, leaving Humana’s modest earnings beat and unchanged full-year outlook short of expectations, Reuters reported, citing analysts.

Humana Price Action

HUM Stock Price Activity: Humana shares were down 6.60% at $363.07 during premarket trading on Wednesday, according to Benzinga Pro data.

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