By Lisa Beilfuss
Humana Inc. on Monday cut its adjusted earnings outlook for the
full year and issued downbeat guidance for the current quarter on
the heels of its $34.1 billion tie-up announcement with Aetna Inc.
on Friday.
Humana said higher-than-expected Medicare Advantage admissions,
among other items, prompted the guidance changes.
The insurer, which agreed to be bought by rival Aetna for about
$230 a share, said it now expects to earn an adjusted per-share
profit of $7.75, down sharply from its previous estimate of $8.50
to $9. Adjusted earnings forecasts typically exclude one-time
costs.
For the quarter ended in June, Humana predicted earnings of
$1.60 to $1.65 a share, short of the $2.36 anticipated by analysts
polled by Thomson Reuters.
The Louisville company disclosed the updated guidance in a
regulatory filing ahead of a conference call to discuss the Aetna
tie-up. During that call, Aetna chief financial officer Shawn
Guertin called the update "consistent with the information we
examined during our diligence," adding the companies did "months of
thoughtful analysis."
Humana chief executive Bruce Broussard, meanwhile, said his firm
is performing in a "reasonable fashion," but notes hospital
admissions in its Medicare Advantage business "have not come down
as quickly" as it projected.
Shares of Humana were up 2.4% to $192.04 in early trading, well
below the deal's offer price when it was announced.
Anna Wilde Mathews contributed to this article
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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