WOODLAND HILLS, Calif. (AP) — Insurer Health Net Inc. said Wednesday its profit declined 1 percent in the third quarter on reduced revenue from a contract with the military's Tricare health program.
Health Net said its profit slipped to $61.8 million from $62.7 million. Because the company has fewer shares on the market than it did a year ago, its per-share profit rose to 70 cents from 64 cents. Health Net said its profit totaled 85 cents per share excluding charges related to its cost-cutting efforts and its Northeast business, which it sold in 2009. Revenue fell 18 percent, to $2.79 billion from $3.39 billion.
Analysts expected Health Net to report a profit of 83 cents per share on $2.76 billion in revenue, according to FactSet.
The company's revenue from government contracts dropped 80 percent to $175.8 million because of a new contract with the Tricare program. Under the new contract, Health Net is only reimbursed for expenses and paid fixed fees.
Premium revenue increased 5 percent to $2.58 billion.
Health Net said it now expects an adjusted profit of $3.08 to $3.10 per share for the full year, up from $3 to $3.05 per share. It expects to have fewer shares on the market, but it also expects less revenue and lower commercial membership. The company said its full-year revenue will be about $11.8 billion, down from its previous estimate of $12 billion to $12.5 billion.
Analysts were forecasting a profit of $3.03 per share and $11.83 billion in revenue, on average.
Shares of Health Net rose 11 cents to $27.18 in midday trading.