Q1 EARNINGS: PacifiCare Exceeds Estimates; Foundation Fulfills Expectations
PacifiCare Health Systems Inc. far exceeded expectations with its first quarter earnings, with net income increasing 79% to $74 million, or $1.61 a share, from $41.3 million, or 90 cents a share in the year-ago period. First Call Corp. estimates had projected earnings of $1.28 a share. Bloomberg News/Los Angeles Times reports that PacifiCare, which operates the largest Medicare HMO in the country, avoided the losses that have befallen many plans "because most of its Medicare HMO patients are treated by physicians who share some costs of patient care in exchange for fixed monthly payments." Analysts said that raising premiums for commercial medical plans also helped PacifiCare's bottom line. The company's shares rose an astounding $13.94 to $93.81 in Nasdaq trading. In related news, Foundation Health Systems Inc., reported Q1 operating profits of $46.3 million, or 23 cents a share. The company, whose earnings were in line with analyst estimates, earned $43.3 million, or 22 cents, in the year-ago period. Foundation shares fell 31 cents to $14.94 on the NYSE (5/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.