Humana Q2 Earnings Miss Estimates Due to Higher Benefit Costs, Raises FY25 EPS View

Humana Inc. (HUM) reported Q2 2025 adjusted earnings of $6.27 per share, missing the Zacks Consensus Estimate by 0.8%. Adjusted revenues of $32.4 billion advanced 10.2% YoY. The quarterly results suffered from elevated expense levels and a decline in individual Medicare Advantage membership, but were partly offset by the strong performance of the CenterWell unit. Total operating expenses of $31.3 billion escalated 10.2% YoY. Net income totaled $543 million, plummeting 19.9% YoY.

Humana Inc. (HUM) reported its second-quarter 2025 adjusted earnings of $6.27 per share, falling short of the Zacks Consensus Estimate by 0.8%. The company's adjusted revenues of $32.4 billion increased by 10.2% year-over-year (YoY). While the quarterly results were impacted by elevated expense levels and a decline in individual Medicare Advantage membership, the strong performance of the CenterWell unit partially offset these challenges. Total operating expenses escalated to $31.3 billion, up 10.2% YoY, and net income plunged to $543 million, a 19.9% YoY decrease.

Humana's quarterly earnings of $6.27 per share missed the Zacks Consensus Estimate of $6.32 per share, representing an earnings surprise of -0.79% [1]. The company's revenues of $32.39 billion for the quarter ended June 2025 surpassed the Zacks Consensus Estimate by 1.93%, compared to year-ago revenues of $29.38 billion [1]. Over the last four quarters, Humana has topped consensus revenue estimates three times [1].

The company's earnings report also revealed elevated expense levels, with benefits expense ratio at 89.7%, slightly above the average estimate of 89.5% based on eight analysts [2]. Medical membership in Medicare Supplement declined to 444.1 thousand, compared to the four-analyst average estimate of 419.63 thousand [2]. The strong performance of the CenterWell unit, however, offset these declines, with revenues in this segment rising to $5.54 billion, a year-over-year increase of 11.9% [2].

Humana's stock has lost about 8.3% since the beginning of the year, compared to the S&P 500's gain of 8.3% [1]. The company's Zacks Rank #3 (Hold) indicates that the stock is expected to perform in line with the market in the near future [1]. Investors should closely monitor management's commentary on the earnings call and future earnings expectations to gauge the sustainability of the stock's immediate price movement.

References:
[1] https://finance.yahoo.com/news/humana-hum-q2-earnings-lag-111502018.html
[2] https://www.nasdaq.com/articles/heres-what-key-metrics-tell-us-about-humana-hum-q2-earnings