FHP Restructuring Sends Yearly Profit Down 78%

FHP International Corp.’s organizational upheavals took a toll on the company’s bottom line in the fourth quarter and fiscal year ended June 30.

The operator of managed health-care plans posted a loss in the fourth quarter and said that profit for the year tumbled 78%. Both results included a one-time restructuring charge of $75.1 million stemming from layoffs, and costs related to forming a new physician-management company.

The company said it expects to record additional restructuring charges of $5 million to $10 million during the first half of the current fiscal year.

FHP, which is shifting away from serving members through its own hospitals and salaried doctors to contracting with providers and serving patients who aren’t part of its HMO, lost $39.8 million, or 57 cents a share, in the fourth quarter, compared with net income of $20 million, or 56 cents a share, for the same period a year ago.

Revenue rose 46% to $999.6 million from $683 million.

The health care company reported profit of $12 million, or 64 cents a share, for the fiscal year ended June 30, 1995, down from profit of $58.3 million, or $1.71 a share, in the previous fiscal year. Revenue increased 58% to $3.91 billion from $2.47 billion.

The company had warned early last month that results would be lower than expected because of the reorganization and a variety of other factors.

Analysts, however, said they are bullish about the Fountain Valley company’s future under the restructuring led by new chairman Jack R. Anderson.

“Jack Anderson’s taking control of the company has been a huge, positive step for FHP,” said Todd R. Richter of Dean Witter Reynolds. Richter said the company will return to profitability by January.