With its scraped merger with Aetna Inc. in the rear view mirror, Humana released its full-year guidance expecting earnings per diluted common share to land between $16.65 and $16.85 GAAP.
On a non-GAAP basis, the company anticipates earnings of $10.80 to $11 a share.
Humana also announced that 2017 would be the last year in which the company will offer individual commercial medical coverage, and it will service members in the 11 states where it is currently active. But unbalanced risk pools in the exchanges contained in the federal marketplaces has driven the company out of the sector. The company anticipates revenue related to ACA platforms of $875 million and Humana expects to post a loss of $45 million for the year, or .17 per diluted share.
The Louisville, Ky.-based company announced earlier in the day that the $37 billion merger with Aetna had been called off by mutual agreement after a Washington court ruled last month the proposed deal violated anti-trust regulations. The company said it's entitled to a $1 billion breakup fee from Aetna, or about $630 million net of tax.
The company has declared a cash dividend of .40 a share, a 38% increase from the prior dividend of .29.
Humana also said it plans to roll out a share repurchase plan in the first quarter of $1.5 billion and will repurchase another $500 million in stock over the rest of the year. The company board has authorized the repurchase program to top out at an aggregate of $2.25 billion for the year.
The company is forecasting revenue outside HumanaOne of approximately $54.5 billion for the year, which includes as much as $46.25 billion from its retail segment and $7.5 billion from group business. The company believes it could see $26 billion in revenue from its healthcare services segment.
The guidance also forecast that the company will likely go to the capital markets in coming months and that the Humana's debt-to-capital ratio will rise to a range from 30 to 35%, and company officials did not rule out exceeding the upper range temporarily. The raise could be as large as $1 billion depending on timing and market conditions.
Humana's guidance included expectations that its cash flow from operations of $2.8 billion to $3.2 billion with cap ex for the year ranging from $550 million to $600 million.
In its earnings call, the company said its acquisition strategy for 2017 would focus on targeting companies in the healthcare services segment. And in terms of dispositions, Humana would like to put its long-term care assets on the market, but the company feels there isn't much of a demand.