Humana said on Monday that quarterly net profit more than doubled on strong Medicare membership growth, which prompted the health insurer to raise its 2007 earnings forecast.
Earnings climbed to $155 million, or 92 cents a share, from $61.8 million, or 37 cents a share, during the same period a year ago.
Revenue surged 54% to $5.66 billion from $3.66 billion, with total premium and administrative services fees up 53% from a year ago.
Analysts surveyed by Thomson Financial were looking for net income of 88 cents a share on higher revenue of $5.74 billion.
Looking ahead, Humana said it expects to earn between $4 and $4.20 a share, above its previous $3.90 to $4.10 a share forecast.
JP Morgan analyst William Georges said the better-than-expected performance resulted from improved medical cost trends.
Medical costs as a percent of revenue from premiums rose 110 basis points to 83.2% in the fourth quarter due to increases in the government segment of its business, which outweighed gains on the commercial side.
Humana said membership in its Medicare Advantage plan grew to 1 million, up 80% over the prior year quarter, and a gain of 1% from the Sept. 30, 2006 quarter.
Expanded participation in various Medicare products and markets combined with the company's increased sales and marketing efforts for these programs led to the higher membership level year over year. Medicare Advantage membership for January 2007 had about 1.1 million members.