Humana shares rise 5.4% after raising 2026 profit forecast

Humana (HUM) raised its 2026 GAAP EPS forecast to at least $15.09 from at least $6.52 and its adjusted EPS forecast to at least $9.50 from at least $9.00. Its third-quarter adjusted loss of $0.70 per share was smaller than the $1.01 consensus estimate. Revenue was $41.2 billion, in line with the $41.3 billion consensus estimate.

Shares rose 5.4% at 3:59 p.m. ET, from a $411.79 close.

Quarterly results

Here's how the company did:

• Adjusted EPS: loss of $0.70 per share vs. earnings of $3.24 a year earlier, a smaller loss than the $1.01 consensus estimate
• GAAP EPS: $1.33 per share vs. $1.62 a year earlier
• Revenue: $41.16 billion vs. $32.65 billion a year earlier
• Pretax results, GAAP: $216 million vs. $134 million a year earlier

Net income swung from a loss of $796.0 million in the fourth quarter of 2025 to a profit of $1.19 billion in the first quarter of 2026.

GAAP results for the first nine months were $16.84 per share, against $16.43 a year earlier. Adjusted EPS for the same period was $17.17, down from $21.10.

2026 guidance

The adjusted forecast anticipates a decline from the $17.14 adjusted EPS reported for 2025, which the company attributed to the Star Ratings headwind for Bonus Year 2026, net of mitigation.

Other forecast figures were unchanged: consolidated revenue of at least $160 billion, a consolidated operating cost ratio of 10.0%, plus or minus 25 basis points, and capital expenditures of about $650 million.

Segment results

The insurance segment, which serves Medicare and state-based contract beneficiaries, posted a loss from operations of $303 million, against income of $251 million a year earlier. Its GAAP benefit ratio was 93.7%, compared with 91.1% a year earlier, and better than management's guidance of 'slightly above 94 percent.'

CenterWell revenue was $7.16 billion, up from $5.88 billion a year earlier. Its income from operations fell to $243 million from $305 million.

The company's consolidated benefit ratio rose to 93.9% from 91.1% a year earlier. Favorable prior period medical claims reserve development was $67 million in the third quarter, compared with $275 million a year earlier.

Costs, charges and capital

The company excluded a $358 million put/call valuation adjustment from its adjusted results. It reflects the noncash reversal of a net put liability of about $1.2 billion, shown on the September 30 balance sheet and tied to CenterWell's previous joint ventures with Welsh, Carson, Anderson & Stowe.

The company expects a noncash initial option liability tied to its joint venture with HPS Investment Partners, a BlackRock subsidiary, to be recorded in the fourth quarter. The item is worth $2.14 per share in its 2026 GAAP guidance.

Debt-to-total capitalization fell to 40.9% at September 30 from 42.7% at June 30, primarily reflecting the repayment of commercial paper. Operating cash flow for the first nine months was $5.38 billion, up from $2.57 billion a year earlier.