WELLPOINT EARNINGS DROP IN WAKE OF FAILED MERGER.Byline: Dawn Yoshitake Daily News Staff Writer After shelling out $18 million for its failed merger attempt to create the nation's largest managed health care company and paying other one-time charges, WellPoint Health Networks Inc. reported a 15.6 percent drop in year-end earnings Tuesday. WellPoint, the Woodland Hills subsidiary of Blue Cross of California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , posted net profits of $180 million for the year ended Dec. 31, compared with $214.5 million a year earlier. The company racked up $34.5 million in one-time charges, including the merger and changes in accounting rules regarding pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. assets. WellPoint and neighboring neigh·bor n. 1. One who lives near or next to another. 2. A person, place, or thing adjacent to or located near another. 3. A fellow human. 4. Used as a form of familiar address. v. Health Systems International Inc. called off their merger in December following a volatile fight over control of the new company. Between HSI's $20.2 million merger-related tab and WellPoint's multimillion bill, the final cost of the failed merger exceeded $38 million. Without the one-time charges, WellPoint posted flat year-end earnings. Higher hospital costs during the fourth quarter, a larger mix of products with lower profit margins and larger losses since rates for workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. were deregulated in 1995 contributed to the flat earnings, said spokesman John Cygul. Revenues from premiums charged reached $2.9 billion for the year, up 11.5 percent from a year ago. WellPoint's medical plan memberships increased 7 percent to 2.8 million, compared with the year earlier. "With the Health Systems merger behind them, with the recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. of the foundation behind them, for the first time since they've been a public company we'll see what they can really do," said Todd Richter, a Dean Witter Reynolds Dean Witter Reynolds was an American stock brokerage catering to the middle class. In 1997, it merged with the Morgan Stanley Group to form Morgan Stanley Dean Witter. The amalgamated firm is now known as Morgan Stanley. analyst. WellPoint closed at 33-1/8, down -1/4 from the previous day. |
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