Humana, Yum shares fall in early trading on Q1 reports; Turning Point Brands’ spike

Investors reacted poorly Wednesday morning to earnings reports from Louisville-based Humana and Yum Brands, with Humana shares falling more than $13, or more than 5%, in early trading — though they quickly recovered almost all of the decline.

And an earnings report by Louisville-based tobacco products company Turning Point Brands caused the share price to spike more than 7% early Wednesday.

Humana said its first-quarter revenue jumped nearly 13%, to $16.1 billion, thanks primarily to a larger-than-expected gain in Medicare Advantage customers.

Brian Kane

CFO Brian Kane told investors in an earnings call Wednesday morning that the company performed well in the open enrollment period, which allows people to sign up for Medicare coverage. As a result, the company now expected to gain between 415,000 and 440,000 customers this year, up about 10% from its initial projection.

The customer gain also prompted Humana to increase its earnings-per-share expectations for the year to about $17.25, up about 2.4 percent from its previous projection.

However, the company also said that its benefits expense ratio, which reflects how much of the premium dollars it has to spend on medical care, rose by 1.7 percentage points, to 86.2%.

Shortly before 11 a.m., shares traded at $251.54, down 1.5%.

Yum Brands reported that its first-quarter sales, at $1.25 billion, fell 8.5% from a year earlier, while costs stayed about the same. Net income, at $262 million, plunged 39.5%.

The restaurant chain, which includes KFC, Pizza Hut and Taco Bell, saw its share price fall as much as 3.6% in early trading. Shortly before 11 a.m., shares traded for $101.06, down 3.2%.

Meanwhile, Turning Point Brands, which sells e-cigarette supplies, chewing tobacco and related products, said its first-quarter sales rose 24%, to nearly $92 million — though the gain was offset somewhat by higher costs, which rose 21 percent. Net income, at nearly $6.6 million, more than doubled from a year earlier.

The company’s shares traded for $46.85 shortly before 11 a.m., up about 9.5 percent.