Humana on Wednesday reported second-quarter results that topped estimates, as the health insurer’s spending on medical services came in line with expectations. 

The company also maintained its 2026 adjusted profit outlook of at least $9 per share. 

The earnings beat was driven by strength across Humana’s insurance business and CenterWell healthcare services unit, Humana CFO Celeste Mellet said in an interview. She said medical and pharmacy cost trends tracked in line with Humana’s expectations across new and existing members. The company saw “slight favorability” in medical costs in the inpatient space, particularly among members receiving care from value-based providers, she added. 

Still, in a Wednesday note, Cantor Fitzgerald analysts called the unchanged profit outlook a “disappointment” after recent earnings beats and guidance raises seen by other insurers overseeing privately run Medicare Advantage plans. Investors have been ratcheting up their expectations for the industry as some companies hike their outlooks and get a better handle on rising medical costs in those plans – an issue that has been dogging the broader sector for more than two years. 

Shares of Humana fell more than 4% in premarket trading despite the solid quarter. The company is one of the largest Medicare Advantage providers serving people aged 65 and older as well as people with ​disabilities.

Here’s what the company reported for the second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: $7.61 adjusted vs. $7.22 expected
• Revenue: $40.87 billion vs. $40.61 billion expected

The company posted second-quarter net income of $694 million, or $5.73 per share, compared with $545 million, or $4.51 per share, in the same period a year ago. Excluding items like amortization and impairment charges, Humana earned $7.61 per share.

Revenue climbed to $40.87 billion from $32.39 billion in the prior-year quarter. The company’s insurer and Centerwell unit both topped analysts’ sales estimates for the quarter, according to StreetAccount. 

Insurers, particularly those that run Medicare Advantage plans, have been pinched by an influx of people seeking care they delayed post-pandemic and high-cost specialty drugs like GLP-1s, among other factors. 

But Humana’s medical benefit ratio — a measure of total medical expenses paid relative to premiums collected — came in at 91.2% for the second quarter, which is in line with what analysts were expecting. Mellet said the ratio also matched the company’s expectations for the quarter across both new and current members. 

“I think that it’s a combination of just [medical cost] trend stabilizing and then our actions as well to help drive better health outcomes for our members and our patients,” Mellet said. 

Still, the ratio is slightly higher than the 89.9% reported in the year-earlier period. A lower ratio typically indicates that the company collected more in premiums than it paid out in benefits, resulting in higher profitability.

Mellet said medical cost expectations for next year are “fairly consistent.” The company is watching to see if services such as inpatient admissions will continue to decline this year, but she said “at this point, we call medical costs more stable.” 

Meanwhile, pharmacy medical cost trends remain “very elevated,” driven by drug prices and the launch of new medicines, Mellet noted. She said those costs will be slightly higher next year compared to 2026, but added that it’s a broader drug cost issue, not a question of member demand. 

Mellet said Humana expects changes to its 2027 Medicare Advantage plans to help improve profitability and put the company on track to reach a sustainable pretax margin of at least 3% by 2028. She said the insurer also remains confident in its ability to boost earnings by expanding membership, improving the quality ratings of its Medicare Advantage plans, maintaining pricing discipline and controlling costs.