Sierra Health profit rises

Thursday, July 24, 2003 | 10:59 a.m.

SUN STAFF AND WIRE REPORTS

Sierra Health Services Inc. of Las Vegas, the largest health insurer in Nevada, said Wednesday that income from continuing operations in the second quarter nearly doubled due to its "disciplined" pricing policies, expense controls and higher investment income.

The company also raised its earnings outlook for the year.

Sierra Health stock jumped $3.67, or 17 percent, to $24.97 and traded as high as $25.40 on the news this morning.

For the second quarter, Sierra said net income from continuing operations rose to $20.5 million, or 68 cents a share, from $10.5 million, or 34 cents a share, a year earlier. The latest results topped the average earnings estimate of analysts polled by Thomson First Call of 54 cents a share.

Net income for the latest quarter, which includes results from discontinued operations, was $20.3 million, or 67 cents a share.

Net income for the year-ago second quarter, which included a loss of $20,000 for discontinued operations, was $10.5 million, or 34 cents a share

Quarterly revenue of $370 million was up from $317 million in the year-ago quarter.

For all of 2003, Sierra now expects operating earnings of $2.60 to $2.70 a share, well above analysts' earnings estimates of $2.19 a share.

For 2002, Sierra reported $1.39 a share in operating earnings.

The company's estimated earnings for 2003 include Tricare proposal preparation costs and exclude potential dilution from senior convertible debentures.

Sierra's results include a $245,000 loss, 1 cent per share, for the company's reclassification of its workers' compensation insurance product as a discontinued operation. The company announced in January that it was seeking strategic alternatives for the workers' comp unit, which represents a small percentage of the company's total operation.

Sierra serves nearly 1.2 million people through health benefit plans for employers, government programs and individuals.