Health insurance major, Humana Inc. (NYSE:HUM) reported better-than-expected earnings for the third quarter as it generated higher revenues from premium and services. The company also increased its fiscal 2011 earnings forecast on lower projected benefit expense ratios in the company's retail and employer group segments and higher average Medicare membership.

For the quarter which ended on Sept. 30, Humana earned $444.8 million, or $2.67 a share, higher than $393.2 million, or $2.32 a share, last year. Excluding a favorable reserve adjustment of 13 cents, the company reported non-GAAP earnings of $2.54 a share, topping Street view of $2.02 a share.

Quarterly revenues rose 11 percent to $9.3 billion, while the Wall Street was expecting $9.25 billion. Revenues from premiums rose about 9 percent to $8.85 billion and services revenue surged 176.3 percent to $356.2 million.

For the quarter, consolidated benefit ratio stood 80.7 percent, down 90 basis points from 81.6 percent last year.

Individual Medicare Advantage membership rose 10 percent to 1.61 million, helped by a successful enrollment season associated with the 2011 plan year as well as age-in enrollment throughout the year. Individual Medicare Advantage membership has increased 152,700 or 10 percent through September 2011 from 1,460,700 at December 31, 2010.

Membership in the company's individual stand-alone Prescription Drug Plans (PDPs) also increased 47 percent to 2.48 million and HumanaOne medical membership advanced 13 percent to 424,000.

"In Medicare, our clear focus on strong financial protection and higher quality coordinated health care for seniors represents a powerful value proposition, and continues to drive membership growth, now nearly 4.5 million people," said Michael McCallister, Humana's chief executive officer.

For fiscal 2011, the company raised its earnings view to about $8.35 to $8.40 a share from its previous estimate of $7.50 to $7.60 a share. Revenues are expected in the range of $36.5 billion to $37 billion. Wall Street expects the company to earn $7.65 a share on revenue of $36.82 billion for fiscal 2011.

For fiscal 2012, the company projects earnings in the range of $7.40 to $7.60 a share, exclusive of any future share repurchases. Revenue is projected to be between $38.25 billion and $38.75 billion. Analysts expect earnings of $7.79 a share on revenue of $38.44 billion for fiscal 2012.

The company said it has strengthened the value proposition to the Medicare beneficiaries it serves through stable premiums and benefits in its Medicare Advantage and stand-alone PDP offerings in fiscal 2012 through its usual Medicare bid margin reset. As a result of improving its Medicare value proposition membership gains in these Medicare offerings are anticipated to be strong in the coming year.

Shares of the company closed Friday's regular trading session at $80.56 on the New York Stock Exchange.