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California | CALIFORNIA EARNINGS

Foundation Health Systems' Profit Increases 27%

November 02, 2000|From Bloomberg News

Foundation Health Systems Inc., one of California's largest insurers, said Wednesday that third-quarter profit rose 27% as it added customers, raised premiums and controlled costs.

Net income rose to $44.6 million, or 36 cents a share, from $35.1 million, or 29 cents a share, a year earlier, Foundation said in a news release distributed by Business Wire. Revenue rose 6.1% to $2.29 billion, from $2.16 billion.

The Woodland Hills-based company was expected to earn 34 cents a share, the average estimate of analysts surveyed by First Call/Thomson Financial.

Foundation said it raised premiums about 11.5% from a year ago for employer health plans. Its health-care costs rose 5.3% from a year ago, though prescription drug costs rose 10%. Foundation said its medical loss ratio--the portion of every premium dollar that pays for medical costs--rose to 85.3% from 84.9% a year ago. Administrative costs fell about 3.4%.

"Last quarter, we saw a lot of the changes they've made start to grip," said Fox-Pitt, Kelton Inc. analyst Greg Crawford, who has a "buy" rating on the stock.

Foundation shares were unchanged at $20.19 on the New York Stock Exchange. The shares have more than tripled this year.

Dole Food Co., the world's biggest seller of fresh fruit, reported a loss in its fiscal third quarter because of the euro's decline against the dollar and higher fuel costs.

Loss from operations narrowed to $1.3 million, or 2 cents a share, from $1.9 million, or 3 cents, a year earlier.

Sales in the quarter ended Oct. 7 rose 1.8% to $1.44 billion, the company said in a statement.

Westlake Village-based Dole said in September that earnings would be hurt by the euro, which has fallen 15% this year, reducing the amount Dole gets when sales of bananas and other fruits in Europe are converted into dollars. Coupled with increased fuel costs, the weaker euro offset cost savings from the closing of banana operations in Nicaragua and Venezuela.

Dole shares rose 6 cents to close at $12.13 on the NYSE.

At a Glance

Other Southern California company earnings, excluding one-time gains and charges unless noted:

* Los Angeles-based home equity lender Aames Financial Corp. reported a third-quarter net loss of $2.5 million, or 40 cents per share, compared with a net loss of $750,000, or 12 cents, a year ago. Revenue fell to $59.9 million from $60.9 million.

* Los Angeles-based trade show producer Key3Media Group Inc. reported a third-quarter net loss of $2.1 million, or 4 cents per share, contrasted with net income of $12.6 million, which included a one-time gain, or 24 cents, a year ago. Revenue rose to $62.1 million from $60.5 million.

* MRV Communications, a Chatsworth maker of optical components and network infrastructure systems, reported a third-quarter operating loss of $67 million, or $1.06 per share, contrasted with net income of $1.6 million, or 1 cent, a year ago. Revenue rose to $82.7 million from $71.3 million.

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