Humana officials attributed the slump in profit to higher-than-expected Medicare Advantage costs, litigation expenses and overall higher operating costs.
Humana CEO Michael McAllister attempted to reassure investors the company is still on solid ground, despite the fact it is reducing the rest of its fiscal year 2012 projections. “Our company’s strategy is sound, though we are disappointed by the need to lower our full-year earnings guidance,” he said in a news release. “We believe the steps we are taking to address certain short-term operational challenges will put us back on the path for sustainable earnings growth moving forward.”
Total revenue in the second quarter increased 4.5 percent to $9.7 billion compared with $9.3 billion last year. For the first six months of FY 2012, Humana recorded total revenue of $19.92 billion, a 7.8 percent increase from the first six months of last year, and net income of $604 million, a 22.1 percent decline from last year.
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