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.
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.
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.
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.
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 .
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.
Health Net presently carries a Zacks Rank #3 (Hold).
Performance of HMOs