Foundation Health Gains 22% in First Quarter
Foundation Health Systems Inc., one of California’s largest managed-care companies, said Wednesday its first-quarter operating profit rose 22%, meeting Wall Street estimates, driven by higher pricing for health plans and lower costs.
The Woodland Hills-based company’s operating profit rose to 28 cents a share from 23 cents a year ago, excluding a gain of 11 cents from the sale of businesses and restructuring in the year-ago quarter.
Net income rose to $34.1 million compared with profit from operations of $28.5 million a year ago. Revenue at Foundation, which has 5.3 million customers through various HMO and other programs, rose 1.9% to $2.2 billion.
“Clearly our efforts to focus on core operations, disciplined pricing and administrative efficiencies are paying off,” Chief Executive Jay Gellert said.
Gellert said he was comfortable with analysts’ consensus estimate for full-year earnings of $1.30 per share. For 1999 the company earned $1.21 before one-time charges.
Foundation said monthly per-member revenue from health plans that have not been divested rose 8% for the first quarter compared with a year earlier. Health plan premium revenue rose to $1.79 billion from $1.77 billion. Government contracts and specialty services revenue rose to $389 million from $367.3 million, and investment and other income rose to $22.4 million from $18.7 million.
Foundation shares fell 50 cents to close at $9.44 on the New York Stock Exchange.
At a Glance
Other California company earnings, excluding one-time gains and charges unless noted:
* Chiron Corp. said profit rose 70% on sales of its vaccine for the meningitis bacteria. The Emeryville-based biotechnology company said net income rose to $40.2 million, or 21 cents a share, from $23.7 million, or 13 cents, in the year-ago quarter. The year-earlier figure reflects about $3 million in restructuring charges. The results beat the 16-cent estimate of analysts. Sales rose 23% to $217 million.
* Los Angeles-based Kilroy Realty Corp. reported first-quarter net income of $9.6 million, or 35 cents per share, compared to $9.9 million, or 36 cents, a year ago. Funds from operations rose to $20.7 million, or 66 cents, from $18.8 million, or 59 cents, a year ago. Revenue totaled $43.8 million, up from $37.6 million.
* Tejon Ranch Co., one of the largest Southern California landholders, reported a first-quarter net loss of $571,000, or 4 cents a share, compared to net earnings of $369,000, or 3 cents, a year ago. Revenue fell to $9.2 million from $12.2 million. It attributed the decline to the sale of a fiber optic communications easement for $1.8 million.
* Woodland Hills-based Zenith National Insurance Corp. reported a first-quarter net loss of $4.4 million, or 26 cents a share, compared with net income of $104.4 million, or $6.09, a year ago. Revenue fell to $110.4 million from $162.2 million.
