Pacificare Health Systems Inc. said net income for its fiscal year ended Sept. 30 was $3 million, a 47% decline from net income of $5.7 million for the prior year.
Revenue for the year totaled $172 million, contrasted with $89.9 million for last year.
The Cypress-based company attributed the earnings decline to higher payments to physicians, increased prescription drug costs and increased expenses incurred in its expansion in Oregon, Oklahoma and Texas.
Although characterizing the results as "disappointing," company President Terry Hartshorn said the "record membership growth and investments in overhead . . . will favorably impact next year's results."
For the fourth quarter, the company reported net income of $862,000 on revenue of $55.7 million, compared to net income of $1.4 million on revenue of $23.9 million.
In addition to owning and operating health maintenance organizations in California, Oregon, Oklahoma and Texas, Pacificare also owns an insurance company.