Is A Beat In The Cards For Humana's (HUM) Earnings In Q2?
Zacks Investment Research | Jul 28, 2019 11:14PM ET
Humana Inc.’s (NYSE:HUM) second-quarter 2019 results are scheduled to be reported on Jul 31, 2019. In the last reported quarter, the company delivered operating earnings per share of $4.48, beating the Zacks Consensus Estimate by 4.2% as well as improving 33.3% year over year. This upside can primarily be attributed to solid revenues and Medicare Advantage membership growth.
The company boasts a stellar earnings surprise history, having surpassed estimates in all the trailing four quarters, the average being 5.05%.
Q2 Factors
Solid membership growth is likely to have contributed to the company’s performance in the to-be-reported quarter. It expects second-quarter earnings to be about $5.24, indicating a 32.3% surge from the year-ago reported figure.
Humana’s strong Medicaid and Medicare lines of businesses are likely to favor its topline. The Zacks Consensus Estimate for revenues is pegged at $15.8 billion, suggesting growth of 11.4% from the year-ago reported figure.
Total premiums for the to-be-reported quarter are expected toface a decline. The Zacks Consensus Estimate for the same implies a 12.5% increase from the prior-year reported number.
However, Humana expected second-quarter earnings per share to be 30% lower than the full-year tally.
The company is expected to have seen a rise in individual Medicare Advantage membership count.
Humana is also likely to have retained its capital deployment efforts through share buybacks and dividend payouts in the second quarter of 2019.
However, the company might have witnessed a rise in operating expenses due to growth-related investments and benefit expenses.
An increase in leverage due to growth-related investments in the to-be-reported quarter is likely to heighten financial risk for the company and burden its margins.
What the Quantitative Model States
Our proven model conclusively shows that Humana is likely to beat on earnings this to-be-reported quarter. This is because the stock has the right combination of a positive Zacks Investment Research
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