Humana: Q4 Net Beats Estimates, Raises Full Year Guidance

Humana reported Q4 net income jumped 150% to $155 million, or $0.92/share, compared to analysts' average estimate of $0.88/share, on revenue growth of 54% to $5.65b. President and CEO Michael McCallister commented on how Humana went from being a regional firm to a national competitor and said based even on the low-end of '07 guidance, Humana will have nearly doubled in size and doubled its income in two years. Humana credits a surge in enrollment in its Medicare Advantage and Medicare stand-alone prescription-drug plans, having surpassed 1 million at year end '06 (+80% y-o-y). Rival UnitedHealth Group by comparison now expects a decline in Q1 enrollments (total ~1.4m at year-end '06). Humana raised its full year '07 EPS forecast to $4.00 - $4.20, from $3.90 - $4.10 (and $2.90 in '06), compared to analysts' estimate of $3.91. Humana's shares gained 0.9% to $57.84 in normal trading yesterday.

Sources: Press release, Bloomberg, Forbes-AP, WSJ
Commentary: Medicare Enrollment Triples Humana's Q3 Profit • Jim Cramer's Take on Humana
Stocks/ETFs to watch: Humana (HUM). Competitors: UnitedHealth Group (UNH), Aetna (AET), Cigna (CI), Coventry Health Care (CVH), WellPoint (WLP). ETFs: iShares Dow Jones US Healthcare Provider (IHF)

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