Health Net Earnings: Here’s Why Investors are Not Happy Now

Health Net Inc. (NYSE:HNT) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 1.89%.

Health Net Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 173.68% to $0.52 in the quarter versus EPS of $0.19 in the year-earlier quarter.

Revenue: Decreased 2.78% to $2.74 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Health Net Inc. reported adjusted EPS income of $0.52 per share. By that measure, the company beat the mean analyst estimate of $0.51. It missed the average revenue estimate of $2.74 billion.

Quoting Management: “We produced solid operating improvement in each line of business in the second quarter of 2013. G&A costs were higher than our expectations primarily due to the reinstated Medicaid premium tax expenses and increased spending to prepare for health care reform and the implementation of California’s Coordinated Care Initiative,” said Jay Gellert, Health Net’s chief executive officer.

Key Stats (on next page)…

Revenue decreased 1.05% from $2.77 billion in the previous quarter. EPS decreased 16.13% from $0.62 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.60 to a profit $0.59. For the current year, the average estimate has moved up from a profit of $2.07 to a profit of $2.25 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]