) is set to report fourth-quarter 2013 results on Feb 5, 2014.
Last quarter, it posted a 6.94% surprise. Let's see how things
are shaping up for this announcement.
Factors this Past Quarter
Although the launch of the "Humana Helps" campaign, the
Accountable Care agreement with St. Luke's University Health
Network, and investments in the trend vendor initiatives like
Humana Chronic Cares Program and in-home care for Humana members
are expected to help the company enhance revenues, a number of
negatives are likely to mar the overall results in the upcoming
quarter. Humana has been witnessing rising expenses on
account of higher operating cost and depreciation and
amortization costs. Moreover, an expected increase in medical
costs in the Employer segment in 2014 is believed to mar company
financials going forward.
Additionally, since Humana is heavily reliant on Medicare
Advantage revenue the health care reform that has reduced the
selling season for the Medicare Advantage plans are spelling bad
news for the company. Also, ban on annual and lifetime coverage
caps, annual fees on health insurance companies and excise tax on
high premium insurance policies, will likely increase expenses
pressurizing margins. Pricing pressure from competitors,
particularly from BlueCross BlueShield and increased capital
expenditures to settle lawsuits are likely to dampen the results
Our proven model shows that Humana will lag earnings this
quarter. That is because the stock has a negative
(Expected Surprise Prediction) and a Zacks Rank of #4.
Negative Zacks ESP:
That is because the Most Accurate estimate stands at 89 cents
whereas the Zacks Consensus Estimate stands at 93 cents, making
the difference -4.30%.
Zacks Rank #4 (Sell):
Humana's Zacks Rank #4 decreases the predictive power of ESP. We
caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum as is the
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
), with Earnings ESP of +2.90% and Zacks Rank #3 (Hold).
), with Earnings ESP of +4.55% and Zacks Rank #3.
), with Earnings ESP of +9.09% and Zacks Rank #3.
AETNA INC-NEW (AET): Free Stock Analysis
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HUMANA INC NEW (HUM): Free Stock Analysis
PHARMERICA CORP (PMC): Free Stock Analysis
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