Health Net Inc., one of California's largest health insurers, posted a third-quarter loss of $2.4 million, or 2 cents a share, Monday as it booked a charge against earnings to pay for a legal settlement.
That contrasted with net income of $69 million, or 55 cents a share, a year earlier.
The Woodland Hills-based company said earnings were reduced by $89 million to settle a lawsuit that accused it of misrepresenting the financial reserves of Business Insurance Group, a workers' compensation subsidiary it sold in 1998. Health Net settled the case for $137 million; $89 million was the most the company could claim for tax purposes.
Without that charge, the company would have posted a profit of 74 cents a share, enough to beat analysts' estimates by 3 cents.
Revenue was up 9% to $2.8 billion from $2.6 billion a year earlier -- largely because of sales of its health-plan services, which increased 6% to $2.3 billion.
Health Net's government contract revenue rose 28% to $482.3 million. Revenue was bolstered by its participation in the Pentagon's Tricare program, which covers the health care of military personnel, their dependents and armed forces retirees.
Health Net said its enrollment dropped by 2%, largely because it lost a contract with the California Public Employees' Retirement System and its 178,000 plan participants.
But the company did boost its 2003 earnings forecast to $2.68 to $2.70 a share, up from its previous guidance of $2.63 to $2.67 a share.
Health Net reported earnings before the stock market closed. Shares of the company fell 20 cents to $31 on the New York Stock Exchange.