Despite 86% Rise in Q4 Profit, Humana (HUM) Misses Street Views; Guidance Still Below the Street

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HUM Hot Sheet

Revenue Growth %: +11.2%

Financial Fact:
Provision for income taxes: 142M

Today's EPS Names:
VSNT, CIM, KH, More

Following the release of fourth-quarter results earlier, Humana Inc. (NYSE: HUM) shares are trading down over 5.6 percent Monday morning.

Revenue for the quarter rose 9 percent year over year to $9.06 billion and fell just short of the Street’s consensus of $9.24 billion.

Operating expenses totaled $8.72 billion and accounted for 17.7 percent of sales during the quarter, substantially higher than the 14.9 percent during the same period a year earlier.

Net income rose 86 percent to $199 million and resulted in earnings of $1.20 per share, just shy of the Street’s estimate of $1.21. Non-GAAP EPS fell 1.8 percent from $1.14 during the year-ago quarter to $1.12.

Cash flows used in operations were $1.80 billion compared to cash flows used in operations of $47 million in the fourth quarter of 2010. The company ended 2011 with $10.38 billion in cash, cash equivalents, and investment securities, an increase of 8 percent from the beginning of the year.

Humana’s management team guidance calls for earnings of $1.35 to $1.45 per share for the first quarter of 2012 and $7.50 to $7.70 per share for the full year. The guidance ranges are well below the Street’s ranges of $1.81 and $7.99 per share, respectively. The company forecasts revenue will fall to between $38.75 billion and $39.25 billion throughout the fiscal year, slightly higher than the $38.68 billion the Street is predicting.

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