Humana, one of the largest U.S. providers of Medicare plans,
raised its forecast for membership additions to its Medicare Advantage rolls by 40,000, and now expects to add about 190,000 individual members to such plans this year.
Humana shares, which have soared in the past year, fell 3.5 percent to $87.00 in premarket trading.
The Louisville, Kentucky-based company has drawn investor favor as many on Wall Street see its presence in privately run Medicare plans as a sweet spot. Insurers are expected to capitalize on the U.S. post-war baby boom population becoming eligible for Medicare, the government health program for the elderly.
Humana's quarterly net income jumped to $199 million, or $1.20 per share, from $107 million, or 63 cents per share, a year earlier.
Earnings were in line with Wall Street's average estimate, according to Goldman Sachs analysts.
Revenue rose 9 percent to $9.06 billion, below the $9.24 billion that analysts expected, according to Thomson Reuters I/B/E/S.
Humana reported a relatively solid fourth quarter... although not crushing expectations as the company did during the first three quarters of the year, Leerink Swann analyst Jason Gurda said in a research note.
Medicare Advantage enrollment stood at 1.64 million at the end of December, up 12 percent from a year earlier. The company gained an additional 173,000 members in January, reflecting results from the annual enrollment period for 2012.
For 2012, Humana forecast earnings of $7.50 to $7.70 per share, up from its earlier projected range of $7.40 to $7.60. Analysts have been looking for $7.99.
While management guidance raise was modest, we see this as the bullish signal we are looking for and view a bull case scenario of $9.50 EPS in 2012 as probable, Sanford Bernstein analyst Ana Gupte said in a research note.
At Friday's close, Humana shares were up about 3 percent this year, after soaring 60 percent in 2011.
(Reporting By Lewis Krauskopf; Editing by Lisa Von Ahn)