We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Retail Segment Further Drive Humana's (HUM) Q3 Earnings?
Read MoreHide Full Article
Humana Inc.(HUM - Free Report) will report third-quarter 2017 results on Nov 8, before the market opens.
The company has a decent surprise history. It pulled off positive surprises in all of the last four quarters with an average beat of 7.2%. Last quarter, the company delivered a positive earnings surprise of 7.84% on the back of strong performance by its Retail segment. Let’s see how things are shaping up for this announcement.
The company’s retail segment has been performing well over past many quarters driven by its Medicare and Medicaid expansion initiatives. We expect the trend to continue in the third quarter as well. However, the Zacks Consensus Estimate for the segment’s revenues is pegged at $11.2 billion that reflects a slight decrease of 1% year over year.
The company’s consistent growth in premium revenues has been largely driven by Medical membership growth. Humana has seen solid medical membership increase in its Individual Medicare Advantage and Group Medicare Advantage businesses. For the quarter, Zacks Consensus Estimate for the same is currently pegged at 14 million, up 48% year over year.
Other Factors
The standalone Prescription Drug Plans membership is likely to have grown, adding significantly to the Medicare business.
Nevertheless, Humana is expected to suffer from rising benefit expenses that keep putting pressure on margins.
Individual commercial membership is expected to remain a drag due to the rise in premiums along with benefit redesigns in place since the beginning of 2016. Along with other companies like Aetna Inc , Anthem Inc , UnitedHealth Group, Inc (UNH - Free Report) , Humana has also started scaling down this business and plans to exit it in 2018. This segment is expected to affect the company’s results in the third quarter as well.
Earnings Whispers
Our proven model does not conclusively show that Humana is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Humana has an Earnings ESP of -1.00%. This is because the Most Accurate estimate is pegged at $3.32 while the Zacks Consensus Estimate stands at $3.27. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank:Humana currently carries a Zacks Rank #3. Despite having a favorable Zacks Rank, the negative Earnings ESP makes the prediction inconclusive. You can see the complete list of today’s Zacks #1 Rank stocks here.
Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Can Retail Segment Further Drive Humana's (HUM) Q3 Earnings?
Humana Inc.(HUM - Free Report) will report third-quarter 2017 results on Nov 8, before the market opens.
The company has a decent surprise history. It pulled off positive surprises in all of the last four quarters with an average beat of 7.2%. Last quarter, the company delivered a positive earnings surprise of 7.84% on the back of strong performance by its Retail segment. Let’s see how things are shaping up for this announcement.
The company’s retail segment has been performing well over past many quarters driven by its Medicare and Medicaid expansion initiatives. We expect the trend to continue in the third quarter as well. However, the Zacks Consensus Estimate for the segment’s revenues is pegged at $11.2 billion that reflects a slight decrease of 1% year over year.
The company’s consistent growth in premium revenues has been largely driven by Medical membership growth. Humana has seen solid medical membership increase in its Individual Medicare Advantage and Group Medicare Advantage businesses. For the quarter, Zacks Consensus Estimate for the same is currently pegged at 14 million, up 48% year over year.
Other Factors
The standalone Prescription Drug Plans membership is likely to have grown, adding significantly to the Medicare business.
Nevertheless, Humana is expected to suffer from rising benefit expenses that keep putting pressure on margins.
Individual commercial membership is expected to remain a drag due to the rise in premiums along with benefit redesigns in place since the beginning of 2016. Along with other companies like Aetna Inc , Anthem Inc , UnitedHealth Group, Inc (UNH - Free Report) , Humana has also started scaling down this business and plans to exit it in 2018. This segment is expected to affect the company’s results in the third quarter as well.
Earnings Whispers
Our proven model does not conclusively show that Humana is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Humana has an Earnings ESP of -1.00%. This is because the Most Accurate estimate is pegged at $3.32 while the Zacks Consensus Estimate stands at $3.27. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Humana Inc. Price and EPS Surprise
Humana Inc. Price and EPS Surprise | Humana Inc. Quote
Zacks Rank:Humana currently carries a Zacks Rank #3. Despite having a favorable Zacks Rank, the negative Earnings ESP makes the prediction inconclusive. You can see the complete list of today’s Zacks #1 Rank stocks here.
Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>