(RTTNews) - Health insurance firm Health Net, Inc. (HNT: News ) Tuesday reported a loss for the third quarter that reflected hefty asset impairment charges. Adjusted earnings increased from the prior year, as revenues rose nearly 4%, and surpassed analysts' estimate. The company also revised its earnings guidance for the full year, lowering the top end of the prior range.

Net loss for the quarter was $66.0 million or $0.64 per share, compared to a net income of $18.5 million or $0.17 per share in the year-ago quarter.

Latest quarter results included $170.6 million in noncash charges for the impairment of goodwill and other assets related to the pending sale of the company's Northeast division, and $19.5 million related to the company's operations strategy that is designed to reduce general and administrative expenses.

Prior-year quarter's results included a $17.1 million pretax charge related to the company's operations strategy and a $14.6 million pretax charge for impairment of the company's investments.

Excluding items, net income was $69.6 million, or $0.67 per share, much higher than $37.8 million or $0.35 per share in the previous year. On an average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.61 per share for the quarter. Analysts' estimates typically exclude special items.

The Woodland Hills, California-based company's total revenues increased 3.9% to $4.01 billion from $3.81 billion in the third quarter of 2008. Six analysts estimated revenues of $3.99 billion for the quarter.
Health plan services premiums for the quarter increased to $3.17 billion from $3.07 billion last year. Revenues from government contracts were $758.51 million, higher than $724.32 million last year. Net investment income increased to $27.69 million from $10.20 million a year ago. Administrative services fees and other income for the quarter were $15.58 million, up from $11.61 million in the comparable period.

Total health plan enrollment as of September 30, declined 3.8% to about 3.6 million members from a year ago. As of September 30, total commercial risk enrollment decreased by 166 thousand, or 8%, to around 1.9 million members from last year.

Commercial premium yields per member per month, or PMPM, increased 7.6% from a year ago. Total commercial health care costs PMPM increased 8% compared with the third quarter of 2008.

Looking ahead, Health Net said including the impact of $100 million to $110 million in expected operations strategy-related pretax charges and additional charges related to the pending sale of the Northeast business the company expects to take in 2009, it expects full-year earnings of $0.51 to $0.56 per share, down from the previous range of $1.85 to $2.10 per share.

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