Insperity (NSP) - Get Report lost nearly a third of its market value after the human-resources provider dashed analyst expectations, reporting subpar quarterly earnings and lowering its guidance for the fourth quarter as well.
The stock plunged 31% to $74.39 after the Houston HR giant reported adjusted per-share earnings of 75 cents, just three-quarters of the $1.01 a share estimate of analysts surveyed by FactSet.
The shares traded on Monday as low as $67.06, down 38%. After a modest rebound on Tuesday, shares of Insperity were down 1.26% on Wednesday, to $69.95.
Insperity's revenue, at $1.04 billion, came in 13% higher than it did in the year-earlier period. It matched the $1.04 billion consensus estimate.
The revenue gains came from a jump in the number of employees at the companies for which Insperity provides HR and administrative services for, with the company focusing particularly on small and midsized businesses.
Company executives attributed the disappointing earnings report to higher medical-claims activity.
But Insperity argued that the higher health costs did not indicate any long-term trend, with the HR provider optimistic about long-term trends in sales.
"While Q3 large medical claim activity in our plan was disappointing, our expectations for long-term trends in sales, pricing and direct costs remain solid," Chairman and Chief Executive Paul Sarvadi said in a statement.
Insperity pared its guidance for the fourth quarter and now expects adjusted earnings per share of 50 cents to 61 cents. Analysts surveyed by FactSet had forecast adjusted EPS of 81 cents for the final quarter.