Humana Inc. (NYSE:HUM) slumped in its stock price on Wednesday, following the release of fourth-quarter results. Revenues came in at $14.1 billion, compared to $13.1 billion in the prior-year quarter.
Pre-tax income (GAAP) measured $436 million, compared to $490 prior-year. Earnings per Share (GAAP) were $2.58, compared to $1.29 prior-year. 2019 EPS guidance of approximately $16.60 to $17.10 on a GAAP basis, $17.00 to $17.50 on an adjusted basis, exceeding long-term growth targets.
The company’s year-over-year results in both 4Q18 and FY 2018 were favorably impacted by strong Medicare Advantage membership growth and significant operating efficiencies in FY 2018 driven by productivity initiatives implemented in 2017.
“GAAP and Adjusted EPS results for 4Q18,” according to the news release, “were further positively impacted by the benefit of a lower tax rate year-over-year as a result of the Tax Reform Law enacted in 4Q17, allowing the company to invest pretax dollars in its employees, the communities of its members, technology and its integrated care delivery model to drive more affordable healthcare and better clinical outcomes; and a lower number of shares in 2018, primarily reflecting share repurchases.
According to CEO Bruce Broussard, “We’re pleased with the consistency of and ongoing improvement in our performance, which can be attributed to our focus on optimizing our core operations.
“The investments we made in 2018 to improve consumer experience, clinical programs and external broker relationships all contributed to our ability to exceed average industry growth in Medicare Advantage (MA) for 2019, with full membership growth estimated between 375,000-400,000 members.”
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