PacifiCare Health Systems
expects to miss analysts' expectations for the third quarter because of higher-than-expected health-care costs.
The company said it expects a loss of 10 cents a share to break-even results for the quarter ended Sept. 30, compared with earnings of $1.58 a share in the year-ago period. A
First Call/Thomson Financial
survey of 19 analysts produced a mean earnings estimate of $1.90 a share for the company's third quarter.
PacifiCare said higher health-care costs will lower third-quarter pretax earnings by $120 million to $130 million, while the company estimated unanticipated third-quarter shared-risk costs of $70 million to $75 million.
Additionally, medical claims and benefits payable reserves will increase by about $25 million to $30 million. The company also expects to incur about $25 million in the current period for advances, loans and other settlements, and will temporarily suspend new enrollment in its Medicare program.
Shares of PacifiCare were trading at $32.63 in after-hours activity, down $12.63, or 37.8%, on the day. The shares ended the regular session at $33.38.