UPDATE 2-Health Net cuts 2011 profit outlook on court ruling

* To cut 2011 EPS view by $1.40

* To pay around $180 mln in damages

(Adds background)

April 5 (Reuters) – Insurer Health Net Inc said it
was cutting its 2011 earnings outlook, after the Louisiana
Supreme Court ordered it to pay $180 million in damages related
to the sale of three failed health plans.

The company expects to cut its full-year forecast by at
least $1.40 per share. Its prior view was $2.05 a share.

Three state receivers overseeing the liquidation of health
plans sold to Health Net’s unit AmCareco Inc by a former unit in
1999 had filed lawsuits, saying Health Net was responsible for
the misconduct of AmCareco as a “controlling shareholder.”

Health Net expects to pay around $180 million in
compensatory and punitive damages, calculated before tax.

The company said it is currently assessing its legal options
after the court’s decision.

The company’s shares closed at $33.75 on Monday on the New
York Stock Exchange.
(Reporting by Shravya Jain in Bangalore; Editing by Don
Sebastian)

UPDATE 2-Health Net cuts 2011 profit outlook on court ruling