Health Net (HNT) Posts Q3 Loss of 11c/Share

Health Net (NYSE: HNT) reported Q3 EPS of ($0.11), $0.83 worse than the analyst estimate of $0.72. Revenue for the quarter came in at $3.79 billion versus the consensus estimate of $3.71 billion.

The GAAP net loss resulted from approximately $106 million of expenses incurred in the third quarter of 2014 related to the company’s new master services agreement with Cognizant. The $106 million is comprised of an approximately $85 million, non-cash, impairment of the company’s information technology assets that will be sold to Cognizant upon completion of the transaction and approximately $21 million in other transaction-related and other expenses.

“We believe the Cognizant transaction will help us address our scale issue and enhance Health Net’s product development and service capabilities. This in turn should strengthen our competitive position for the long term,” explained Jay Gellert, Health Net’s chief executive officer.

“The transaction-related costs incurred in the third quarter were consistent with our earlier guidance regarding the cash impact of such transaction expenses,” he added.

Health Net sees FY2014 EPS of $1.95, versus prior guidance of $3 and the consensus of $2.3.

For earnings history and earnings-related data on Health Net (HNT) click here.

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