PacifiCare’s Annual Earnings Rise a Healthy 45% : Profits: The Cypress-based HMO said sales for the fiscal year ended Sept. 30 topped $1 billion for the first time. The firm is called ‘a cash-generating machine.’

Capping a year of growth, PacifiCare Health Systems Inc. said its earnings rose 45% last year as sales topped $1 billion for the first time.

The Cypress-based health-maintenance organization reported earnings for its fiscal year ended Sept. 30 of $25.7 million, or $2.20 a share, up from last year’s $17.6 million, or $1.48 a share.

Sales jumped 27% to $1.2 billion, up from $975.8 million last year.

PacifiCare shares rose $2.125 to $25.625 in advance of the announcement, which was made after the market closed.

PacifiCare, which owns and operates HMOs in California and four other states, attributed its improved profits to its ability to charge higher rates to commercial customers while at the same time holding down hospital costs. Membership increased by 8% to 726,496 during the year.

Company President Terry Hartshorn described the company’s year as “very successful.” He cited as the “most significant achievement” the success of the company’s program for Medicare patients, Secure Horizons.

During the year, PacifiCare announced a merger with another HMO, Health Plan of America in Orange, and the acquisition of Execu-Fit Health Programs in San Francisco. The company brought its Medicare program to Tulsa, Okla., and opened several pharmacies in San Diego.

The company reported a particularly strong fourth quarter. Earnings were $7.9 million, or 70 cents a share, up 34% from $5.9 million, or 49 cents a share, for the same period last year. Revenue was $342.2 million, a 25% increase from $272.8 million in the year-earlier quarter.

Mark Matheson, an analyst for Cruttenden and Co. in Newport Beach, said he was impressed by PacifiCare’s fourth-quarter results. “People were surprised the numbers were as good as they were given the tone of the competitive environment,” he said.

He added that the recession may have helped PacifiCare since some patients may be postponing elective surgery or other expensive medical procedures to avoid having to pay out-of-pocket expenses. And he credited PacifiCare with having an enviable financial position.

“PacifiCare just has an awesome balance sheet,” he said, noting that the company has $206 million in cash and securities and only $2.3 million in debt. “It’s just a cash-generating machine.”

A Healthy Profit for PacifiCare

In the fourth quarter ended Sept. 30, PacifiCare Health Systems Inc. saw its earnings climb 34% to $7.9 million and its revenues soar 25% to $342.2 million. The company attributed the gains to better operating margins.

Figures are in thousands, except per-share data.

4th Qtr 4th Qtr 12 Months 12 Months 1991 1990 1991 1990 Revenue $342,252 $272,815 $1,242,357 $969,665 Net income 7,944 5,916 25,702 17,638 Per share 0.70 0.49 2.20 1.48

Source: PacificCare Health Systems Inc.