Health Net Inc. reported sharply lower earnings for the second quarter that nevertheless exceeded analyst expectations.
The Woodland Hills insurance company on Tuesday reported net income of $58.4 million (75 cents a share) for the quarter ended June 30, compared to income of $121 million ($1.49) for the same quarter a year ago. Revenue increased 22 percent to $4.16 billion.
Adjusted for one-time events, the company’s net income was 95 cents a share. Analysts on average expected net income of 89 cents on revenue of $4.21 billion, according to Thomson Financial Network.
During the quarter, the company spent $26.4 million on a project to streamline its information technology systems. But that project was suspended when Health Net announced on July 2 a merger agreement with Centene Corp. in St. Louis.
Under the agreement, Health Net would be absorbed into Centene and its headquarters would move from the San Fernando Valley to St. Louis.
“We intend to continue a disciplined execution of our strategy as we work to complete the Centene merger transaction,” Jay Gellert, Health Net’s chief executive, said in a statement.
Shares closed up 70 cents or 1 percent to $68.65 on the New York Stock Exchange.