SOFTWARE WRITE-OFF NO ISSUE HEALTH NET STOCK UP DESPITE LOSS FROM ONE-TIME CHARGE.

Byline: Evan Pondel Staff Writer

WOODLAND HILLS - Health Net Inc.'s fourth-quarter profit fell about 20 percent, compared with the same period a year ago, as a one-time charge for now-obsolete software weighed heavily on the managed-care company.

Among California's largest health insurers, Health Net reported Wednesday evening that its quarterly net income fell to $45 million, or 36 cents per share, compared with $56 million, or 45 cents per share, a year ago. Last month, Health Net officials had said the company would take a $48 million pretax charge for investment write-downs on technologies.

Analysts did not express concern about Health Net's results. Instead, the chief executive officer and chief financial officer were congratulated by analysts listening in on a conference call Thursday.

Despite the adulation, Health Net officials revealed their more-tempered view of the quarter.

``This has been a tough couple of weeks for our group,'' Jay Gellert, president and chief executive officer of Health Net, said during the call.

The Woodland Hills-based company also took a charge of $12.4 million to write off an investment in a health care information technology company, MedUnite.

Still, Health Net reported operating cash flow of $182.6 million for the quarter, compared with $99.2 million a year ago. For the year, the company reached $420 million in operating cash flow. For 2003, Health Net projects that operating cash flow is expected to hover between $460 million and $470 million.

Company officials also expect first-quarter earnings to rise to 54 cents a share from 47 cents a share in the same quarter last year. Wall Street analysts anticipate that the company will earn 56 cents a share for the quarter.

Health Net shares rose 52 cents, or 2.3 percent, to close at $23.60 Thursday on the New York Stock Exchange.