Lower enrollment numbers and decreased revenues--as well as an increased percentage of revenue used for medical care--were major reasons behind a $49 million loss for HealthNet, Inc., for FY2009. In the fourth quarter of 2009 alone, HealthNet's losses amounted to $45.2 million.
Some investors weren't surprised by the news, considering HealthNet sold its Northeast business in Q409. "Sale of the Northeast business makes comparison with our estimates challenging," Citigroup analyst Charles Boorady said in a note to clients, according to MarketWatch. "[B]ut pro-forma information allows for same-store trend analysis that did not look surprising."
HealthNet COO James Woys tried to put a positive spin on the losses, saying that the company was "very pleased" with its performance in such a "challenging environment."
Boorady, however, believes that more pain could be in HealthNet's future, considering California's already stretched budget and problem with delayed payments.
Overall, the company's adjusted net income for the 2009 was $235.1 million, compared with adjusted net income for 2008 of $199.1 million. Enrollment in HealthNet's Western health plans dropped to 3 million in 2009 from 3.1 million at the end of 2008. The lower numbers are attributed to higher unemployment.
Total revenues dropped a little year over year, as well. Q4 2009 total revenues were $3.8 billion, compared with $3.9 billion in Q4 2008. Health plan services revenues were $3.0 billion in the Q4 2009 and $3.1 billion in Q4 2008.
Regardless, the company has raised its 2010 profit forecast to a range of $1.92 to $2.02 a share from its previous view of $1.90 to $2.00 a share.