Health and Healthcare
Humana Maintains Outlook With Aetna Merger in Sight
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Humana Inc. (NYSE: HUM) reported its third-quarter financial results before the markets opened on Friday. The company had $2.16 in earnings per share (EPS) on $13.36 billion in revenue, which compares to Thomson Reuters consensus estimates of $2.13 in EPS on revenue of $13.64 billion. The same period from the previous year had EPS of $1.85 and $12.24 billion in revenue.
In terms of guidance, the company expects EPS for the 2015 full year to be $7.75, compared to the consensus estimate of $7.76 in EPS.
As previously announced, Humana has entered into a definitive merger agreement with Aetna under which, at the closing, Aetna will acquire each outstanding common share of Humana for $125 in cash and 0.8375 of an Aetna common share. Humana’s stockholders agreed to the merger agreement at a special stockholder meeting in mid-October, and this deal is still subject to regulatory approval.
Bruce D. Broussard, president and CEO of Humana, commented on earnings:
Our third quarter results included operating performance for our Medicare businesses that was generally in line with our expectations and continuing momentum in our Healthcare Services segment, but were challenged by our individual commercial business. With all this, consumers have been and continue to be at the forefront of our integrated care delivery model, which produces quality care for our members through clinical excellence and a superior consumer experience. Our proposed transaction with Aetna will provide millions more consumers with a new opportunity to engage with innovative wellness and chronic-care programs that have a proven record of measurably improving people’s health and well-being.
At the end of September, the company had cash, cash equivalents and investment securities totaling $10.90 billion, down $231 million from $11.13 billion sequentially.
Shares of Humana closed Thursday up 1.2% at $179.05. The consensus analyst price target is $207.93, and the 52-week trading range is $129.31 to $219.79.
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