Shares in Health Net Inc. dropped more than 3 percent Monday as the healthcare provider said profit and revenues were hurt by sluggish enrollment.

Health Net reported first quarter net income of $89 million (77 cents per share), a 15 percent increase from $77 million (65 cents) for the same period a year earlier. The boost was the result of increased enrollment in U.S. government-funded plans for the elderly and higher margins, the company said.

Revenue for the Los Angeles-based healthcare provider increased 8 percent to $3.4 billion. A 2 percent dip in overall enrollment limited the gain, the company said.

Shares in Health Net dropped $1.77, or 3 percent, to $55.13 in afternoon trading Monday on the New York Stock Exchange.