Insurer Humana, weighing Aetna deal, holds back 2017 outlook

(Reuters) - U.S. health insurer Humana Inc HUM.N on Wednesday put off providing a 2017 financial outlook as it reviews the court ruling against its planned $34 billion sale to Aetna Inc AET.N and said it had cut its Obamacare rolls.

Humana, like Aetna last week, said it was weighing its opportunities and would decide how to proceed before the Feb. 15 termination date for the merger. The companies struck the deal 18 months ago, but the U.S. Justice Department sued to block the transaction this summer.

Humana promised an outlook by Feb. 16.

Excluding charges, the company reported higher-than-expected fourth-quarter earnings on strength in its Medicare Advantage business for older and disabled people. A charge on a closed long-term care business and for the government risk payment program related to Obamacare drove Humana to a net loss.

The company’s shares were down 1.3 percent at $192.75 in early trading.

Humana and other insurers have lost money on former President Barack Obama’s national healthcare law, known as Obamacare, and have cut back offerings for 2017. President Donald Trump and Republicans have said they will replace the insurance with new products, expected on the market no sooner than 2019.

Leerink Partners analyst Ana Gupte said Humana’s comments about 2017 indicated the company would stay independent.

“We see the Aetna deal as dead at this time and view Humana’s comments on providing standalone guidance as an indicator that the company intends to go it alone rather than pursue an alternate tie-up with Cigna,” Gupte wrote in a research note.

The Justice Department also blocked Cigna's sale to Anthem Corp ANTM.N, but the court has not ruled yet.

Most of Humana’s nearly $13 billion in fourth-quarter revenue, which was down 4 percent from a year earlier, came from its direct-to-customer Medicare Advantage business, but the decline was partly due to its smaller Obamacare business.

Humana said the number of individual customers with health plans that comply with the rules created by Obamacare fell both in 2016 and in 2017.

Last month, Humana had 152,000 people in Obamacare plans, a 69 percent decrease from December, when it had 404,000 in those plans sold on and other state-based exchanges and 655,000 people in all individual plans.

The company reported a net loss of $401 million, compared with year-earlier net income of $101 million.

Excluding items, earnings of $2.09 per share beat the analysts’ average estimate of $2.05, according to Thomson Reuters I/B/E/S.

Additional reporting by Ankur Banerjee in Bengaluru; Editing by Lisa Von Ahn