Insurer Humana's 3Q profit climbs 13 percent

INDIANAPOLIS — Humana Inc.'s third-quarter net income jumped 13 percent on Medicare Advantage enrollment growth, and the health insurer also raised its 2011 earnings forecast.

The Louisville, Ky., company said Monday that it earned $444.7 million, or $2.67 per share, in the three months that ended Sept. 30. That compares with earnings of $393.2 million, or $2.32 per share, in the same quarter last year.

Revenue climbed 11 percent to $9.3 billion from $8.35 billion.

Adjusted income was $2.54 per share. The performance beat Wall Street forecasts. Analysts forecast earnings of $2.03 per share on $9.26 billion in revenue.

Humana is the second-largest provider of Medicare Advantage plans, which are privately run versions of the government's Medicare program. Subsidized by the government, the plans offer basic Medicare coverage topped with extras like vision or dental coverage or premiums lower than standard Medicare rates.

The insurer said Medicare Advantage membership climbed 10 percent to 1.6 million people compared with last year's quarter, mainly because of a successful enrollment season last fall. The insurer's Medicare prescription drug coverage enrollment also jumped 47 percent to 2.5 million people, helped by a low-cost drug plan it offers with retail giant Wal-Mart Stores Inc.

Humana now expects 2011 earnings of $8.35 to $8.40 per share. That's up from previous guidance of $7.50 to $7.60 per share. Analysts expect $7.69 per share.

The company also said it expects 2012 earnings of between $7.40 and $7.60 per share, which would represent a drop compared to this year. Humana's initial guidance last year for 2011 also represented an earnings decline because the insurer sets Medicare Advantage projections conservatively.