Humana (NYSE:HUM) shares fell after it pulled its 2025 profit guidance, reigniting investor concerns about the impact of rising medical costs on the insurer’s bottom line.
In January, Humana (NYSE:HUM) downgraded its 2025 profit forecast from $37 per share to between $22 to $26 per share upon the expectation it would see a rise in medical claims as patients undergo non-urgent surgeries delayed due to the pandemic.
On its earnings call on Wednesday, management said it withdrew its profit forecast for 2025 due to lower-than-expected government Medicare reimbursement rates.
CEO Bruce Broussard told investors the rates are "not sufficient to address their current medical cost trend environment and regulatory changes.”
The company’s withdrawal of its profit guidance overshadowed Humana’s first quarter earnings beat.
Adjusted earnings per share of $7.23 were ahead of estimates of $6.02.
Revenue of $29.6 million beat forecasts of $28.6 billion.
It reaffirmed its full year adjusted EPS guidance of approximately $16, in line with Street estimates of $16.06.
It also raised its 2024 Medicare Advantage annual membership growth forecast by 50,000, expecting to add 150,000 members of 2.8%.
Shares of Humana traded down 5.6% at about $310 late morning on Wednesday.