FHP Reports 25% Drop in Net Earnings

By MARIA L. LA GANGA

Sept. 4, 1987 12 AM PT

FHP International Corp. of Fountain Valley reported net earnings of $6.9 million for its 1987 fiscal year ended June 30, down 25% from $9.2 million posted in fiscal 1986. Operating earnings for the year fell 29% to $11.6 million from $16.3 million.

The health maintenance organization’s fiscal 1987 revenues, however, rose 39% to $367.5 million, from $264.7 million a year earlier.

For the fourth quarter, the company posted a net loss of $1.8 million, contrasted with a net income of $2.7 million a year earlier. FHP reported a final-quarter operating loss of $4.5 million, contrasted with operating income of $5.6 million in the last three months of its fiscal 1986. Revenues for the fourth quarter increased 30% to $97.7 million from $75.4 million.

Dr. Robert Gumbiner, FHP’s chairman and chief executive, said net income for fiscal 1987 was “less than anticipated and lower than that of the previous year” because of a write-down of “doubtful accounts,” defaulted payments and development expenses for the company’s new start-up operations.

FHP International, through its wholly owned subsidiary FHP Inc., operates prepaid dental plans and home nursing programs.

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Maria L. La Ganga

Maria L. La Ganga is the deputy managing editor for California and Metro, overseeing the Los Angeles Times’ largest editorial department. She joined The Times in 1981 as an academic intern, splitting her time between the former Metro section and National Dragster, the official publication of the National Hot Rod Assn. She has served as Seattle bureau chief, San Francisco bureau chief, edited in the Business section and pitched in on six presidential elections, five for The Times and one for the Guardian. La Ganga left The Times in 2015 and returned in 2018 after a brief hiatus during which she wrote for the Guardian and the Idaho Statesman. She was named city editor in 2022 and promoted to her current role in 2024. La Ganga graduated from Granada Hills High School in the San Fernando Valley and Cal State Northridge, where she studied English literature and journalism.

FHP Reports 25% Drop in Net Earnings

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