PACIFICARE: Lowers Projected Earnings, Toppling Shares 14%
PacifiCare Health System Inc. shares toppled 14% yesterday on news that the country's largest Medicare HMO operator expected second-quarter earnings to fall below forecasts, the Bloomberg News/Los Angeles Times reports. The $11.63 slide to end at $74 yesterday was "the biggest one-day percentage decline" for the company since November 1997 and comes just one month after shares hit "a record high" of $100.38 when analysts predicted earnings of 40% to 45% for the year. The company expects to post second-quarter earnings of $1.45 to $1.50 a share, falling short of the $1.58 average projection of First Call Corp., said PacifiCare spokesperson David Erickson. After disclosing its predicted shortfall to "several analysts who had projected higher earnings," Erickson "declined to discuss why those forecasts were off, saying different analysts had different problems with their models of PacifiCare's results." Despite the disappointing second-quarter forecast, Erickson said that the firm expects to report full-year earnings of $6.20 to $6.31 a share, compared to analysts' estimated earnings of $6.31 a share (Bloomberg News/Los Angeles Times, 6/23).
This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.