Humana Reports 11.3% Revenue Growth, Net Income Decline in Q3 2024

Humana Inc. reported significant financial developments in its 10-Q filing for the quarter ending September 30, 2024. The company experienced a notable increase in total revenues, which reached $29,397 million, marking an 11.3% rise from $26,423 million in the same quarter of 2023. For the nine months ended September 30, 2024, total revenues amounted to $88,548 million, up 10.8% from $79,912 million in the prior year. This growth was primarily driven by a 11.4% increase in insurance premiums, which totaled $28,000 million for the quarter and $84,354 million for the nine-month period.

Despite the revenue growth, Humana's profitability faced challenges. Net income for the third quarter was $480 million, a decrease of 42.2% from $830 million in Q3 2023. For the nine months, net income fell to $1,897 million, down 37.3% from $3,024 million in the same period last year. The diluted earnings per share reflected this decline, dropping to $3.98 for Q3 2024 from $6.71 in Q3 2023, and to $15.72 for the nine months, down from $24.26.

Total operating expenses also increased, rising to $28,669 million for the third quarter, a 13.7% increase compared to $25,217 million in the prior year. For the nine months, operating expenses reached $85,443 million, up 13.1% from $75,551 million. The increase in expenses was attributed to higher costs associated with the company's operations, including a rise in benefits expenses.

Strategically, Humana announced its exit from the Employer Group Commercial Medical Products business, expected to be completed by the first half of 2025. This decision is part of a broader strategy to focus on its core Medicare and Medicaid offerings. The company also recorded asset impairment charges of $55 million for Q3 2024 and $151 million for the nine months, reflecting ongoing value creation initiatives.

Membership in Humana's Medicare Advantage plans increased, with individual Medicare Advantage membership rising by 5.3% to 5,659,200 members as of September 30, 2024. However, the company faced challenges in its commercial segments, with significant declines in membership due to the planned exit from the Employer Group business.

Humana's financial position remained robust, with total assets increasing to $50,007 million from $47,065 million at the end of 2023. The company reported total stockholders' equity of $17,565 million, up from $16,262 million. Cash and cash equivalents also rose to $5,116 million, although net cash provided by operating activities decreased significantly to $3,494 million from $11,115 million in the previous year, primarily due to the timing of Medicare premium remittances.