Humana (NYSE:HUM) announced its results for the third quarter on November 5, 2012. Humana is a managed health care company that offers health and supplemental benefit products.

Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days. SEE: Everything Investors Need To Know About Earnings

The Numbers: Humana posted an EPS above analyst expectations, despite revenues falling short of predictions. The company reported $2.62 per share versus the $2.05 per share estimate and revenues of $9.65 billion versus the $10.09 billion estimate. EPS fell 1.9% while revenue climbed 3.8% from the same period last year. Humana's revenue has grown during each of the past four quarters on a year-over-year basis. Humana reported profit of $426 million during the third quarter. According to the reported number, this is down 4.2% from last year's figures. Last quarter marks the third in a row in which the company's net income has fallen. Profits declined 22.7% in the second quarter and 21.3% in the first quarter.

Management Quote: "Our third-quarter results demonstrate that the issues which surfaced in the second quarter have stabilized," said Bruce D. Broussard, President of Humana. "We believe our improving operations and continued Medicare membership growth, together with our integrated care delivery system investments, position Humana well for a dynamic future."

A Look Back: Net income has increased 10% year-over-year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed 85.2% from the year-earlier quarter.

Looking Ahead: Analysts appear increasingly negative about the company's results for the next quarter. The average estimate for the fourth quarter has moved down from $1.35 a share to $1.28 over the last 90 days. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. The average estimate for the fiscal year is $7.15 per share, down from $7.17 90 days ago.

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Tickers in this Article: HUM

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