First Health Group, Downers Grove, Ill., saw its third-quarter profits tumble 32% amid higher costs and increased competition. Net income for the three months ended Sept. 30 dropped to $27.6 million, or 30 cents per share, from $40.7 million, or 42 cents per share, in the year-ago period. The results include a charge of $1.3 million, or a penny per share, for expenses related to the company's planned $1.8 billion merger with Coventry Health Care, announced last month. Total revenue dipped slightly to $218.4 million from $219.7 million as fees from self-insured employers, First Health's most lucrative business, fell 11.5% to $122.1 million. The company still expects full-year earnings of $1.25 to $1.28 per share, down from the $1.57 per share it posted in 2003.
Lower profits, higher costs at insurer First Health
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