Health Net Beats Analyst Estimates on EPS

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Health Net (NYS: HNT) reported earnings Feb. 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Health Net beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted significantly and GAAP earnings per share shrank.

Gross margins improved, operating margins improved, net margins shrank.

Revenue details
Health Net reported revenue of $2.81 billion. The 14 analysts polled by S&P Capital IQ foresaw sales of $2.78 billion. Sales were 17% lower than the prior-year quarter's $3.37 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.90. The 17 earnings estimates compiled by S&P Capital IQ predicted $0.89 per share on the same basis. GAAP EPS of $0.71 for Q4 were 14% lower than the prior-year quarter's $0.83 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 15.8%, 160 basis points better than the prior-year quarter. Operating margin was 3.5%, 60 basis points better than the prior-year quarter. Net margin was 2.1%, 30 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.89 billion. On the bottom line, the average EPS estimate is $0.63.

Next year's average estimate for revenue is $11.58 billion. The average EPS estimate is $3.35.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 98 members rating the stock outperform and 30 members rating it underperform. Among 58 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give Health Net a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Health Net is hold, with an average price target of $31.38.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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