The Wall Street Journal-20080205-Earnings Digest -- Financial Services- Humana Inc-

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Earnings Digest -- Financial Services: Humana Inc.

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Humana Inc. reported a 57% rise in fourth-quarter profit amid a one- time gain and lower tax and benefit costs, as the health-benefits manager benefited from strong revenue growth in its government segment. The Louisville, Ky., company also raised its full-year forecast by a nickel to a range of $5.35 to $5.55 a share to reflect a lower tax rate than previously anticipated. Humana, one of the largest Medicare insurers, didn't disclose the size of the gain, from the sale of a venture-capital investment. Humana said its benefits ratio -- the percentage of premium revenue used to pay medical bills -- fell to 80.3% from 83.2%, as ratios in government and commercial plans declined. The company's total medical membership climbed 1.7% to 11.5 million. Humana's government segment, which includes Medicare and its military health-services program, posted a 63% rise in pretax income as profit margins rose 46%. In the Medicare Advantage business, which delivers benefits through private health plans, membership increased 14% to 1.14 million. Health insurers have been depending more on government business amid the declining share of employers offering health benefits in recent years. Humana shares were down $2.86, or 3.5%, to $78.98 in 4 p.m. New York Stock Exchange composite trading yesterday.