Health Net Reports Loss for Fourth Quarter
Woodland Hills-based Health Net reported a fourth-quarter net loss of $85.6 million, or 77 cents per share, down from net income of $89.3 million, or 77 cents per share, in the fourth quarter of 2003, the Los Angeles Times reports. The loss includes a one-time pretax charge of $252 million, $169 million of which will be used to settle legal claims related to claims disagreements with hospitals (Wang, Los Angeles Times, 2/9).
Fourth-quarter revenue increased by 3% from $2.78 billion in 2003 to $2.87 billion (Kalra, Hartford Courant, 2/9). Company officials attributed the increase in revenue to higher premiums.
Excluding the charge, Health Net earned 59 cents per share during the fourth quarter, below analysts' average earnings-per-share expectations of 69 cents.
For the year, the company's net income declined from $234 million in 2003 to $42.6 million in 2004 (Los Angeles Times, 2/9). Revenue increased from $11.1 billion in 2003 to $11.6 billion in 2004.
Health Net projects earnings of 50 cents to 55 cents per share for the first quarter, but analysts had predicted earnings of 57 cents per share. For 2005, the company expects earnings of $2.30 to $2.50 per share (Hartford Courant, 2/9).
Health Net CEO Jay Gellert said, "We are using this quarter to put a number of challenging issues behind us" (Los Angeles Times, 2/9).