Humana (NYSE:HUM), a health insurer, posted a better-than-estimated third-quarter profit as it added more members to its individual Medicare Advantage business.
Net income increased to $314mln, or $2.09 per share, in the September quarter, from $290mln, or $1.85 per share, a year earlier, the Louisville, Kentucky-based company said in a statement on Friday.
On an adjusted basis, the company earned $2.16 per share, topping the $2.13 average estimate of 20 analysts surveyed by Capital IQ.
Third-quarter revenue grew 9.2% to $13.36bn, but lagged behind the Wall Street consensus of of $13.64bn.
Humana, which agreed to be bought by Aetna Inc for $37bn in July, is managing large Medicare Advantage health plans for the elderly and disabled. It said individual Medicare Advantage membership jumped 14% to 2.74mln at the end of September.
However, individual commercial membership decreased 11% to 963,700.
"We remain cautious with regard to our expectations around 2016 earnings growth due to the ongoing challenges in the individual commercial business," Chief Financial Officer Brian Kane was quoted in the statement as saying.
Insurers are capitalizing on mergers to help them compete better, as the government tries to reduce healthcare spending following the implementation of Obamacare.