Humana ups outlook and boosts buyback to $1 bln
By John Kell
JohnKell
Humana Inc. HUM, -0.16% raised its full-year earnings target for the second time this year and said first-quarter results would exceed the company's expectations due to a lower-than-expected benefit ratio for the quarter.
The managed-care company now expects first-quarter earnings of $1.86 a share, far above the $1.15 to $1.20 range Humana estimated in February. Humana said the improved projection included a 31-cent gain related to a favorable prior-year development in medical claims.
For the year, Humana now sees earnings of $6.70 to $6.90 a share, up from its February guidance of $5.95 to $6.15. Humana had raised the view in February, when the company said it successfully appealed a decision by the U.S. Defense Department's Tricare health system network, winning back a multibillion-dollar contract that was awarded to peer UnitedHealth Group Inc. (UNH) in 2009.
Humana's also said the company's board increased a share repurchase program to $1 billion, an authorization that runs through June 30, 2013. The program replaces a prior authorization of up to $250 million, which had $100 million outstanding as of Monday.
Humana has about 169 million shares outstanding.
The company also said it plans to report its operating results using the following segments: retail, employer group, and health and well-being services. Humana, which will also disclose results for other businesses, said the new financial reporting format would provide better transparency for its businesses.
Shares of Humana, which intends to release its full results for the first quarter on May 2, closed Monday at $72.68 and were inactive premarket.
Humana Inc. U.S.: NYSE: HUM