Humana Issues Strong Guidance

Second-quarter earnings rose 4% from a year ago at Humana(HUM), as better results in its government segment helped offset a decline in commercial premiums and lower investment income.

The insurer earned $84.1 million, or 51 cents a share, in the quarter, compared with $80.8 million, or 50 cents a share, a year ago. Analysts were forecasting earnings of 51 cents a share in the latest quarter. Sales rose 3% from a year ago to $3.55 billion, about $10 million above estimates.

Total premiums were $3.45 billion in the most recent quarter, compared with $3.30 billion a year ago. Commercial premiums were $1.61 billion compared with $1.79 billion a year ago, while government premiums were $1.84 billion compared with $1.52 billion.

Humana's revenue line included investment income of $31.1 million in the most recent quarter compared with $43.9 million a year ago.

For the year ending in December, Humana reiterated earnings guidance of $2.23 to $2.25 a share, compared with the Thomson First Call consensus of $2.12 a share. The company expects per-share earnings to rise by at least 25% in 2006 to $2.80 a share; the consensus estimate is $2.49.

The shares closed Friday at $39.85.

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