PacifiCare Health Systems, Santa Ana, Calif., reported first-quarter net income of $70.8 million, or $1.91 per share, compared with an accounting-driven loss of $858.8 million, or $24.86 per share, in the year-ago period. Earnings in the 2003 quarter were 135% higher than the $30.1 million profit PacifiCare would have recorded in the 2002 quarter without a goodwill-impairment charge of $25.96 per share. Revenue fell 4.3% to $2.7 billion, largely because of a 13% decline in enrollment, to 2.9 million members. The membership decline was offset by an 18% increase in commercial premiums and reduced medical costs. PacifiCare spent 84.8% of premiums on medical claims during the quarter, down from 88.5% in the year-ago period. It also recorded a per-share gain of 67 cents to account for cash set aside to pay for medical costs that never came to pass. The company confirmed its full-year earnings projection of between $6 per share and $6.10 per share, raised earlier this month from an estimate of between $4.25 per share and $4.35 per share. -- by Laura B. Benko
PacifiCare swings to profit on lower costs
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