MW Has Humana turned the corner? Stock jumps as outlook raised, Medicare business improves

By Tomi Kilgore

Health insurer beats both profit and revenue expectations, while others have disappointed

Shares of Humana Inc. were rallying in early Wednesday trading, after the health insurer reported solid second-quarter results and raised its full-year earnings outlook above Wall Street expectations at a time that other insurers were providing disappointing guidance.

And while Medicare Advantage membership continues to decline, the expected losses for the year are less than previously forecast.

The stock $(HUM.AU)$ jumped 8.3% in premarket trading, enough to pace the S&P 500 index's SPX earnings gainers. The rally puts the stock on track for its best one-day, post-earnings performance in at least five years, according to FactSet data back to August 2020.

The company lifted its 2025 guidance for adjusted earnings per share, which excludes special items, to "approximately $17.00" from approximately $16.25, while the average analyst EPS estimate compiled by FactSet was $16.36.

That comes after UnitedHealth Group Inc. (UNH) on Tuesday reinstated its full-year profit outlook, but at levels well below expectations, and after Centene Corp. $(CNC.UK)$ did the same last week.

Humana said it expects Medicare Advantage membership to decline by up to 500,000 members in 2025, as the company exits certain unprofitable plans and counties, but that's less than previous guidance for a decline of about 550,000.

And the company affirmed its outlook for the insurance segment benefit ratio, which is the percentage of premiums it collected that are paid out - lower is better - of 90.1% to 90.5%.

Humana also said it now expects overall 2025 revenue to be "at least $128 billion," compared with previous guidance of $126 billion to $128 billion, amid better than anticipated Medicare Advantage membership.

For the insurance business, the company raised its revenue outlook to be "at least $123 billion" from a range of $121 billion to $123 billion.

For the second quarter to June 30, net income fell 19.7% from the same period a year ago to $545 million, while adjusted EPS declined to $6.27 from $6.96 but beat the FactSet consensus of $5.92.

Total revenue grew 9.6% to $32.39 billion, above the FactSet consensus of $31.87 billion, as premiums revenue rose 9.1% to $30.72 billion and services revenue was up 27.3% to $1.4 billion.

The company said second-quarter and year-to-date Medicare Advantage revenue is ahead of expectations, due primarily to higher-than-anticipated membership.

The insurance segment benefit ratio for the quarter was 89.9%. up from 89.5% a year ago, but in line with expectations, as medical cost trends lined up in line with the company's projections. That comes after UnitedHealth and Centene reported benefit ratios that were higher than expected.

Humana was among the first to call out rising medical costs last year, and how difficult it was to estimate how predict how the trend would develop, as it pulled its full-year earnings guidance back in April 2024.

UnitedHealth had also pulled its full-year guidance, about a year later, and Centene had done the same in early July.

Humana's stock has lost 8.3% in 2025 through Tuesday, while UnitedHealth shares have shed 48.4% and Centene's stock has dropped 57.9%. In comparison, the Health Care Select Sector SPDR ETF XLV has slipped 2.3% this year and the S&P 500 has gained 8.3%.

-Tomi Kilgore

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July 30, 2025 07:19 ET (11:19 GMT)

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