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PacifiCare Posts Record Earnings of $90.2 Million in 1994 : Performance: The Cypress health-care provider, whose revenue rose to $2.9 billion, attributes gains to membership growth and cost controls.

November 17, 1994|GREG JOHNSON | TIMES STAFF WRITER

CYPRESS — PacifiCare Health Systems Inc. reported Wednesday that both its profit and revenue reached record levels for the latest fiscal year.

The company, a provider of managed health-care services, posted income before an accounting change of $84.6 million, or $3.02 a share. That was up from earnings of $62.7 million, or $2.25 a share a year, for the previous 12 months. Earnings after the accounting change were $90.2 million, or $3.22 a share.

Revenue for the company's fiscal year, which ended Sept. 30, increased by more than 30% to $2.9 billion from $2.2 billion for the previous year.

Alan Hoops, PacifiCare's president and chief executive officer, tied the gains to membership growth and health-care cost controls. PacifiCare's membership was 1,358,219 as of Sept. 30, up 24% from a year earlier.

Total health-care costs as a percentage of premium revenue fell to 83.1% from 84.1%, Hoops said, "due mainly to lower inpatient costs." Overhead expenses, however, rose slightly during the year as PacifiCare continued to spend money on product development and to expand into new areas, the report said.

The company now has members in California, Florida, Oklahoma, Oregon, Texas and Washington.

Fourth-quarter profit was $22.2 million, or 79 cents a share, compared to earnings of $17.1 million, or 61 cents a share, for the same period a year earlier. Three-month revenue rose 29% to $781 million from $605 million.

In Wednesday's Nasdaq trading, PacifiCare's Class A stock was down 75 cents to close at $68.25. Its Class B shares gained $1 to close at $66.75.

Winning Streak

PacifiCare ended its 50th consecutive profitable quarter on Sept. 30. Fourth-quarter revenue, profit and earnings per share all grew well beyond totals for the comparable 1993 period. The company attributed the gains to a 24% increase in membership, coupled with health care cost-control measures. Figures in thousands of dollars, except data per share:

4th qtr. 4th qtr. 12 months 12 months 1993 1994 1993 1994 Revenue $605,479 $780,821 $2,221,073 $2,893,252 Net income 17,111 22,214 62,696 90,251 Per share 0.61 0.79 2.25 3.22

Source: PacifiCare Health Systems Inc.

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