Humana Inc (NYSE:HUM) reported financial results for the fourth quarter of 2025 that presented a mixed picture, with revenues exceeding expectations but earnings falling short. The market's immediate reaction was sharply negative, with the stock trading down significantly in pre-market activity.
Fourth Quarter Performance vs. Estimates
For the quarter ended December 31, 2025, the health insurer reported adjusted (non-GAAP) revenue of $32.64 billion. This figure surpassed the analyst consensus estimate of approximately $32.40 billion. However, the bottom line told a different story. Humana posted an adjusted net loss per share of $3.96, which was wider than the estimated loss of $4.05 per share.
The company's GAAP results were heavily impacted by several one-time items, including substantial impairment charges. The key quarterly comparisons are outlined below:
- Adjusted Revenue: $32.64 billion (Reported) vs. ~$32.40 billion (Estimated)
- Adjusted EPS: -$3.96 (Reported) vs. -$4.05 (Estimated)
- GAAP Pretax Loss: ($1.01) billion for Q4 2025
- GAAP EPS: ($6.61) for Q4 2025
Full-Year 2025 Results and 2026 Guidance
For the full year 2025, Humana reported adjusted earnings per share of $17.14, an increase from $16.21 in 2024. Full-year revenue reached $129.79 billion on an adjusted basis.
Looking ahead, the company provided its financial guidance for 2026, which anticipates a significant decline in profitability. Humana expects full-year 2026 adjusted earnings per share to be "at least $9.00," compared to the $17.14 earned in 2025. This guidance falls well below the current analyst consensus estimate of $12.04 for 2026 adjusted EPS. The company attributed the expected decline primarily to a headwind from lower Medicare Advantage Star Ratings, which will reduce quality bonus payments from the Centers for Medicare & Medicaid Services (CMS) in the coming year.
Market Reaction and Outlook Comparison
The stark guidance for 2026 appears to be the primary driver behind the severe negative market reaction. While the company expressed confidence in its "consumer-focused strategy" and projected individual Medicare Advantage membership growth for 2026, the quantified earnings outlook disappointed investors.
- Humana's 2026 Adjusted EPS Guidance: At least $9.00
- Analyst Consensus Estimate for 2026: $12.04
- Pre-Market Stock Reaction: Down approximately 6.8%
The guidance discrepancy of over $3 per share highlights the significant financial impact the company expects from the Star Ratings issue. In its cautionary statement, Humana noted it had filed a lawsuit challenging the 2025 Star Ratings, which was rejected by a court in October 2025. The company has appealed the decision but stated there is no assurance it will prevail.
Press Release Summary
Beyond the headline numbers, the earnings release detailed several adjustments to GAAP results, including costs related to "value creation initiatives," impairment charges, and valuation adjustments on minority investments. President and CEO Jim Rechtin stated the company was "pleased with our solid financial performance and operational progress in 2025." The focus of the release, however, was squarely on navigating the expected challenges in the 2026 plan year.
For a detailed breakdown of historical earnings, future estimates, and analyst projections, you can review more information on Humana's earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
