The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Humana missed estimates on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share expanded significantly.
Margins grew across the board.
Humana reported revenue of $9.06 billion. The 10 analysts polled by S&P Capital IQ expected to see revenue of $9.26 billion. Sales were 8.5% higher than the prior-year quarter's $8.35 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $1.12. The 18 earnings estimates compiled by S&P Capital IQ predicted $1.20 per share on the same basis. GAAP EPS of $1.20 for Q4 were 90% higher than the prior-year quarter's $0.63 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 22.0%, 320 basis points better than the prior-year quarter. Operating margin was 3.8%, 140 basis points better than the prior-year quarter. Net margin was 2.2%, 90 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $10.26 billion. On the bottom line, the average EPS estimate is $1.76.
Next year's average estimate for revenue is $39.06 billion. The average EPS estimate is $8.11.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Humana is outperform, with an average price target of $96.82.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.