Health Stocks in Motion
Updated from 3:32 p.m. EDT
Shares of PDI (PDII) were among the worst-performing health-related stocks Tuesday, falling 22.3% after the company slashed its 2005 earnings and sales outlook.
The provider of outsourced sales and marketing services to the health care industry now expects earnings of 40 cents to 50 cents a share on sales of $310 million to $320 million, well below the $1.35 to $1.45 a share in earnings and $380 million to $390 million in sales previously forecast. Analysts polled by Thomson First Call had been expecting earnings of $1.36 a share on sales of $380.2 million. PDI blamed the poor outlook on anticipated new business wins that have not materialized, an unexpected cancellation of a contract with Novartis Pharmaceuticals -- a division of Novartis (NVS), higher costs related to the company's decision to add key resources to its business and concerns regarding the continuation of one contract for 100 representatives. Shares traded down $4 to $13.96.
Caremark Rx (CMX) fell 3.3% despite posting solid first-quarter results and raising its 2005 operating profit estimate. The manager of prescription benefits posted earnings of $197.5 million, or 43 cents a share, on sales of $8.38 billion. Results included a charge of $1.2 million. Analysts were expecting earnings of 43 cents a share on sales of $8.04 billion. Looking ahead, Caremark forecast second-quarter earnings of 45 cents to 46 cents a share, in line with expectations. For all of 2005, it forecast operating earnings of $1.92 to $1.94 a share, up from previous guidance of $1.88 to $1.92 a share. Analysts are expecting earnings of $1.91 a share. Shares traded down $1.33 to $38.79.Despite posting a first-quarter sales shortfall, shares of Odyssey HealthCare (ODSY) rose 7.1%. The hospice care provider posted earnings of $5.3 million, or 15 cents a share, on sales of $87.8 million. First-quarter results were negatively affected by a $2.2 million accrual for the Medicare payment cap. Analysts were expecting earnings of 18 cents a share on sales of $89 million. Cash flow from operations during the quarter was $14.3 million. A year ago the company earned $7.9 million, or 21 cents a share, on sales of $84.7 million. Shares traded up 80 cents to $12.15.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV