Health Net, Inc
.'s
HNT
fourth-quarter 20Array5 operating income came in at 66 cents per
share, in line with the Zacks Consensus Estimate. The bottom line
improved Array.5% year over year.
Health Net Inc. (HNT) Street EPS & Surprise
Percent - Last 5 Quarters | FindTheCompany
The quarter benefited from higher memberships and moderate
health care costs.
Including one-time items, Health Net's net income was 47 cents per
share, reflecting a nearly eightfold increase year over year.
Health Net's total revenue increased 7.4% year over year to
approximately $4 billion on the back of higher enrollment in the
Western Region health plans. However, revenues missed the Zacks
Consensus Estimate of $4.2 billion.
Total expenses increased 5.2% year over year to $3.9 billion.
Full-Year Highlights
Health Net's operating income came in at $3.30 per share, up 42%
over 20Array4.
Revenues totaled Array6.2 billion, up Array6% year over year.
Segment Performance
Western Region Operations:
Fourth-quarter revenues of $4.0 billion increased 9.5% year over
year. Net investment income was up 7.2% year over year to
$ArrayArray.9 million. Health plan services' expenses declined 3%
year over year to $3.2 billion.
As of Dec 3Array, 20Array5, total enrollment in the segment grew
4.5% year over year to 3.3 million members. Western Region
commercial enrollment decreased 6% to Array.Array million members
owing to losses in the Arizona and Northwest induvial lines of
business. Enrollment under the company's California health plans
increased 8% to 3 million members. Enrollment in Medicare Advantage
plans were 0.3 million, down 22%. Medicaid enrollment soared
Array2.8% to Array.9 million due to Medicaid expansion under the
Affordable Care Act.
Medical Care Ratio (MCR) for Health Net's health plan services in
the segment improved Array20 basis points to 83.5% from the
prior-year quarter due to strong performance by the Medicaid
business.
Government Contracts
: Revenues increased 7.8% year over year to $Array72 million in the
quarter. Expenses increased 5% to $Array65.9 million.
Financial Update
As of Dec 3Array, 20Array5, Health Net had cash and investments of
approximately $2.3 billion, down from $2.7 billion as of Dec
3Array, 20Array4. The company's debt-to-capital ratio deteriorated
to 27.2% as of Dec 3Array, 20Array5 from 22.6% as of Dec 3Array,
20Array4.
Health Net's operating cash inflow totaled $43Array.Array million
in 20Array5, down from $776 million in 20Array4.
Total assets of Health Net were worth $6.4 billion as of Dec
3Array, 20Array5, higher than $5.4 billion as of Dec 3Array,
20Array4. Stockholders' equity was $Array.8 billion as of Dec
3Array, 20Array5 against $Array.7 billion as of Dec 3Array,
20Array4.
Share Repurchase Update
Health Net spent $94 million in 20Array5 on buying back Array.7
million shares. At Dec 3Array, 20Array5, the company had about $306
million worth shares remaining under its repurchase authorization.
However, the program has been suspended since Jul 2, 20Array5 owing
to the company's pending merger with Centene Corporation
CNC
.
Business Update
On Jul 2, 20Array5, Health Net entered into an agreement with
Centene under which the latter will acquire all the shares of the
former to form a combined entity. The total consideration of the
deal is $6.8 billion, including cash, stock and $500 million in
debt. The transaction is pending regulatory approval and is
scheduled to culminate by early 20Array6.
Health Net completed its transaition to a single claims payment
platform in the fourth quarter, resulting in considerable reduction
in the claims inventory through more efficient claims processing.
Zacks Rank
Health Net presently carries a Zacks Rank #3 (Hold).
Performance of HMOs
The bottom line at UnitedHealth Group Inc.
UNH
beat the respective Zacks Consensus Estimate while the same at
Anthem Inc.
ANTM
missed our expectation in the fourth quarter.
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UNITEDHEALTH GP (UNH): Free Stock Analysis
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