Health Net Reports Almost 30% Increase in Second-Quarter Earnings
Woodland Hills-based Health Net on Thursday reported that second-quarter net profit increased by 29.5% from $41.4 million, or 36 cents per share, in 2004 to $53.6 million, or 47 cents per share, the Hartford Courant reports. Net income included the full effect of a $16.2 million pretax charge, or 8 cents per share after taxes, for litigation costs and $300,000 for severance and benefits costs for layoffs announced in May 2004.
Pretax income from government contracts and a lower percentage of health plan premiums being spent on medical care contributed to the profit increase, according to Health Net officials. Operating profit for the second quarter, excluding realized gains and losses and the litigation charges, were 55 cents per share.
Revenue increased by 3.5% from $2.9 billion last year to $3 billion in the second quarter 2005. Excluding the TRICARE contracts, health plan enrollment decreased by 24,000, or less than 1%, from 3.52 million at the end of March to 3.49 million at the end of June.
Including the effect of litigation charges, the company expects full-year earnings of $1.85 to $2.05 per share. Excluding litigation charges, the company anticipates earnings for the year of $2.30 to $2.50 per share (Hartford Courant, 8/5).