FHP Reports 25% Drop in Net Earnings
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FHP International Corp. of Fountain Valley reported net earnings of $6.9 million for its 1987 fiscal year ended June 30, down 25% from $9.2 million posted in fiscal 1986. Operating earnings for the year fell 29% to $11.6 million from $16.3 million.
The health maintenance organization’s fiscal 1987 revenues, however, rose 39% to $367.5 million, from $264.7 million a year earlier.
For the fourth quarter, the company posted a net loss of $1.8 million, contrasted with a net income of $2.7 million a year earlier. FHP reported a final-quarter operating loss of $4.5 million, contrasted with operating income of $5.6 million in the last three months of its fiscal 1986. Revenues for the fourth quarter increased 30% to $97.7 million from $75.4 million.
Dr. Robert Gumbiner, FHP’s chairman and chief executive, said net income for fiscal 1987 was “less than anticipated and lower than that of the previous year” because of a write-down of “doubtful accounts,” defaulted payments and development expenses for the company’s new start-up operations.
FHP International, through its wholly owned subsidiary FHP Inc., operates prepaid dental plans and home nursing programs.
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