Healthways posts 4Q loss on impairment charge

NASHVILLE, Tenn. (AP) — Wellness program administrator Healthways Inc. posted a larger fourth-quarter loss Wednesday after taking more than $183 million in impairment charges.

Healthways announced in December that it would take a write-down of about $184 million to reflect the end of a contract with health insurer Cigna Corp. The charge came to $183.3 million, and Healthways also reported $9 million in costs related to job cuts and the closures of two call centers. The company reported a fourth-quarter loss of $177.1 million, or $5.32 per share. In the fourth quarter of 2010 Healthways earned $15.6 million, or 45 cents per share.

Excluding one-time items the company reported a profit of 27 cents per share in the most recent quarter. Its revenue fell 8 percent, to $180 million from $195.3 million, as its results a year ago got a boost from a settlement with the Centers for Medicare and Medicaid Services.

Analysts expected Healthways to report an adjusted profit of 34 cents per share and $182.5 million in revenue, according to FactSet.

Healthways' contract with Cigna began winding down Jan. 1, and it will end in February 2013. Cigna has been one of the company's largest customers and a major source of revenue.

In 2011, Healthways lost $157.7 million, or $4.68 per share. In 2010 it reported a profit of $47.3 million, or $1.36 per share. Revenue slipped 4 percent, to $688.8 million from $720.3 million.

The company said it expects a profit of 42 cents to 54 cents per share and revenue of $665 million to $705 million in 2012. The wind-down of the Cigna contract will reduce its revenue by about $75 million.

Analysts were forecasting a larger profit of 76 cents per share and $655.8 million in revenue on average.

Shares of Healthways picked up 15 cents to $7.94 during Wednesday trading and were unchanged aftermarket.