Humana (HUM) Stock Declines on Revenue Miss
NEW YORK (TheStreet) -- Humana (HUM) - Get Report stock is down 1.82% to $175.80 in mid-morning trading on Friday after the company reported disappointing revenue for the 2015 third quarter.
Before the market open this morning, the health insurance company reported a 9% year-over-year increase in revenue to $13.36 billion, falling short of estimates of $13.64 billion.
Humana posted earnings of $2.16 per share for the quarter, beating estimates by 3 cents.
"Our third quarter results included operating performance for our Medicare businesses that was generally in line with our expectations and continuing momentum in our Healthcare Services segment, but were challenged by our individual commercial business," CEO Bruce Broussard said in a statement.
Challenges related to the individual commercial business are expected to continue as the segment faces volatility at the start of the healthcare exchange program, Humana noted.
Retail segment premiums and services revenue increased 14% to $11.35 billion for the quarter, driven by Medicare advantage premiums, while group segment revenue rose less than 1% to $1.82 billion.
Human agreed in July to be acquired by Aetna (AET) for $37 billion. The transaction is pending regulatory approval but is still expected to close in the second half of next year.
Separately, TheStreet Ratings team rates HUMANA INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
We rate HUMANA INC (HUM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, reasonable valuation levels and solid stock price performance. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: HUM
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