Health Stocks in Motion

Updated from 1:45 p.m.

Shares of Odyssey Healthcare(ODSY Quote) were among the best-performing health and pharmaceutical stocks Tuesday, rising 13.1% after the company met reduced third-quarter financial forecasts and said it would repurchase $30 million worth of stock.

The hospice company earned 24 cents a share during the third quarter on sales of $87.5 million. Analysts surveyed by Thomson First Call were expecting earnings of 24 cents a share on sales of $88.2 million.

The company said its strong cash flow and balance sheet provided an "opportunity to repurchase our shares at what we believe to be an attractive price." The buyback announcement comes about two weeks after Odyssey revealed that it was the subject of a false-claims investigation, announced several executive changes and warned that third-quarter earnings would fall short of expectations. On the day of the announcement, its shares tumbled almost 47%. The false-claims investigation centers on the company's claims for payment submitted to the U.S. from Jan. 1, 2000, to present. The civil division of the Justice Department is also looking at the company's conduct regarding patient admissions, patient retention and billing practices. Shares traded up $1.06 to $9.14.

Mentor(MNT Quote) fell 15.6% after the company posted in-line second-quarter financial results but warned that 2005 earnings results would fall short of expectations. The maker of surgical implants earned 28 cents a share on sales of $108.8 million. Analysts were expecting earnings of 28 cents a share on sales of $108.5 million. A year ago the company earned 23 cents a share on sales of $93.3 million. Looking ahead, Mentor said 2005 earnings are expected to grow at a mid-teens rate over 2004 results of $1.15 a share. Growth of 15% would put 2005 earnings at about $1.32 a share. Analysts had been expecting earnings of $1.37 a share. Shares traded down $5.49 to $29.69.