Humana Inc.’s HUM first-quarter 2016 operating earnings came in at $1.86 per share, beating the Zacks Consensus Estimate by 2.8%. Results, however, declined 28% year over year.Humana Inc. (HUM) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompanyThe decline was due to lower operating results at the Retail segment, partially offset by slightly higher operating results in the Group and Healthcare Services segments.Revenues at Humana slipped about 1% year over year to $13.80 billion. Lower premiums and services revenues resulted in the top-line decline. Revenues marginally missed the Zacks Consensus Estimate of $13.77 billion.Quarterly ReviewHumana’s consolidated benefit ratio, which reflects the percentage of benefit expenses in premium revenues, was 84.8%. This marks a deterioration of 170 basis points (bps) year over year due to a rise in benefit ratios in the Retail segment.Consolidated operating cost ratio, which reflects the percentage of operating costs in total revenue less investment income, improved 150 bps year over year to 12.7%. The improvement was primarily driven by cost management initiatives across all lines of business as well as the sale of Concentra in Jun 2015, which carried a higher operating cost ratio.Quarterly Results by SegmentRetail Segment: Reported premiums and services revenues increased 2% year over year to $11.84 billion in the first quarter. The upside primarily reflects an increase in average Medicare Advantage membership and per-member premium increases.The benefit ratio came in at 87.7%, deteriorating from 85.8% in the prior-year quarter due to unfavorable leap year seasonality, lower seasonal policy reserve releases related to the legacy individual commercial business, adjustments to receivables associated with the 3Rs, and the seasonal impact of the Premium deficiency reserve.Operating cost remained flat year over year at 10.8%. Administrative cost efficiencies associated with medical membership growth were offset by the loss of the large group Medicare Advantage account.Group Segment: Reported premiums and services revenues decreased 2% to $1.81 billion, primarily reflecting declines in average fully insured and Administrative Services Only commercial group medical membership. However, an increase in fully insured commercial medical per-member premiums limited the downside.Benefit ratio was 74.8%, up 90 bps year over year, reflecting unfavorable current-year medical claims development as well as unfavorable leap year seasonality.Healthcare Services: Revenues from this segment increased 6% year over year to $6.18 billion, mainly on higher Medicare membership and stand-alone Prescription Drug Plan membership.Operating cost ratio was 95.7%, up 40 bps owing to lower profitability in the provider services business.Financial UpdateAs of Mar 31, 2016, cash, cash equivalents and investment securities of Humana were $12.48 billion, up from $11.68 billion as of Dec 31, 2015.The debt-to-capital ratio of Humana as of Mar 31, 2016 was 28.0%, down 30 bps from Dec 31, 2015.As of Mar 31, 2016, the company had $300 million outstanding under its commercial paper program.Share Repurchase UpdateHumana suspended its share repurchase program on Jul 2, 2015 due to the pending acquisition by Aetna. However, the company has $1.04 billion remaining under its authorization.Dividend UpdateHumana paid cash dividend worth $47 million in the quarter.In Apr 2016, the company’s board of directors announced a cash dividend of 29 cents per share. The dividend will be paid on Jul 29, 2016 to stockholders of record on Jun 30.GuidanceHumana reaffirmed 2016 adjusted earnings per share of “at least $8.85”; projected net membership growth in individual Medicare Advantage of 100,000 to 120,000 and net membership growth in stand-alone PDP offerings of 300,000 to 330,000. Membership in Group Medicare Advantage is estimated to be down 120,000 to 125,000 while the same at Individual commercial is expected to decline 200,000 to 300,000. Revenues are expected to be at least $53.5 billion.Adjusted earnings per share are estimated to be at least $2.15 for the second quarter of 2016.Performance by Other HMOsAmong the other health maintenance organizations (HMOs), UnitedHealth Group Inc. UNH, Aetna Inc. AET and Anthem Inc ANTM surpassed their respective Zacks Consensus Estimate in the first quarter of 2016.Zacks RankHumana currently carries a Zacks Rank #4 (Sell).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AETNA INC-NEW (AET): Free Stock Analysis Report HUMANA INC NEW (HUM): Free Stock Analysis Report UNITEDHEALTH GP (UNH): Free Stock Analysis Report ANTHEM INC (ANTM): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research