Health Insurer Humana Announces Significant Profit Warning
Today health insurer Humana Inc announced that its first-quarter earnings forecast has been cut by nearly half based on new projections for its Medicare plans for the elderly that provide prescription drug coverage.
Humana forecast first-quarter earnings of 44 cents to 46 cents per share against its previous outlook of 80 cents to 85 cents. It projected full-year earnings of $4.00 to $4.25 per share compared with $5.35 to $5.55 previously.
Humana's lower outlook comes a day after shares of the entire health insurance industry were sent reeling after a gloomy forecast from rival WellPoint Inc.
The forecast sent shares of Humana, which is one of the biggest Medicare plan providers, down 22 percent in pre-market trading this morning.
Humana said on Wednesday it based its revised projections for its prescription-drug-only Medicare plans on analysis of pharmacy claims through February.
It cut its projection for full-year operating profit margin for all of its Medicare plans to about 3 percent from 5 percent. Medicare is the U.S. government health plan for the elderly.
Humana said its full-service Medicare Advantage plans as well as its commercial plans for employers and military services business were not affected by the revision in earnings guidance.
Published on March 12, 2008
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