Humana Q1 2026 earnings beat estimates, stock falls

Humana reported first-quarter adjusted earnings per share of $10.31, topping analyst estimates of $10.19, according to Reuters. Despite the beat, Humana stock fell as much as 7% in premarket trading before paring losses.

At 89.4%, Humana’s insurance segment benefit ratio — which measures what portion of premium revenue goes toward medical care — edged out the company’s own target of just under 90%. The company noted that trends in both medical and pharmacy costs were coming in somewhat more favorably than it had anticipated.

Revenue for the quarter reached $39.6 billion, up from $32.1 billion in the same period a year earlier. GAAP diluted earnings per share were $9.83, compared with $10.30 in Q1 2025.

Humana affirmed its full-year adjusted profit forecast of at least $9 per share but lowered its GAAP earnings forecast to at least $8.36 from a prior estimate of at least $8.89. The company said it expects second-quarter insurance segment benefit ratio to come in slightly above 91%, a deterioration from the first quarter.

The decision to hold guidance steady, rather than raise it as some rivals have done, appeared to disappoint investors. “Investors may have been disappointed that Humana did not increase its outlook for 2026 given its strong start to the year,” Morningstar analyst Julie Utterback told Bloomberg. Cantor analyst Sarah James told Reuters that signals about the back half of the year “could be difficult to manage.”

Rechtin told investors that while actual utilization and spending have tracked expectations, federal reimbursement has failed to keep pace, leaving a larger shortfall than the company faced a year ago. “Every year we’re going to step back and look at our whole portfolio,” Rechtin told Reuters. “The practical reality is, all product, if priced appropriately, is good product.” Humana said it will adjust benefits as necessary to maintain profitability.

Humana stood by its earlier projection that enrollment in its individual Medicare Advantage plans would expand roughly 25% over the course of 2026. Total Medicare Advantage membership stood at about 7.1 million as of March 31, up from about 5.8 million a year earlier. Humana holds about 18% of the Medicare Advantage market, according to Yahoo Finance.

Operating costs in the CenterWell segment, which provides primary care to older adults, came in above Wall Street’s expectations. The segment’s operating cost ratio rose to 94.5% from 91.1% a year earlier, the company said. For Humana overall, the quarterly operating cost ratio landed at 10.2%, well above the consensus analyst forecast of 9.5%, according to Bloomberg.

A 2.48% average increase in federal Medicare Advantage payment rates for 2027, announced by the U.S. government, falls short of what Humana says it needs to cover escalating costs.