Maxicare to Divest Unprofitable Units

Maxicare Health Plans Inc. said it will sell or close money-losing health plans in four states, as the managed health-care company seeks to return to profitability after reporting a second-quarter loss. Los Angeles-based Maxicare posted a loss before charges of $8.6 million, or 48 cents a diluted share, compared with net income of $4.2 million, or 23 cents, a year earlier. That loss was larger than the 12 cents estimated by four analysts polled by First Call Corp. Maxicare, which operates in seven states, plans to divest its businesses in Wisconsin, Illinois, North Carolina and South Carolina. Those units lost $7.6 million combined in the second quarter. Maxicare said the businesses it will retain are in high-growth markets in California, Indiana and Louisiana. Maxicare said it was too early to comment on potential job cuts. In the second quarter, revenue rose 14% to $185.7 million, from $163.1 million a year earlier. Membership rose 18% to 548,000 in the same period. Maxicare shares fell 44 cents to close at $6.50 on Nasdaq.