Thursday's Early Winners & Losers: All's Well at WellCare

Revenue more than doubles at the Florida health insurer.
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Clark

(CLK)

soared in after-hours trading on news the North Barrington, Ill.-based company had agreed to be bought by the Dutch insurance company Aegon for $16.55 a share, or $293 million in cash.

The offer represents a 32% premium based on the $12.50 closing price of Clark stock Friday. Under the merger agreement, Aegon will commence a tender offer no sooner than Nov. 22, to acquire all outstanding shares of Clark. All Clark shares not otherwise acquired in the tender offer will be acquired by Aegon in a merger promptly following the completion of the tender offer.

The company said a committee of Clark directors approved an agreement for a privately held firm led by Clark management to buy certain Clark businesses not included in the Aegon deal for $35.4 million in cash and the assumption of certain indebtedness. Shares were trading up $3.50, or 28%, to $16.

WellCare

(WCG) - Get Report

surged after the Tampa, Fla.-based health insurer blasted third-quarter estimates, raised guidance and gave its CEO an added chairman's title. The company made $43 million, or $1.06 a share, up from $16 million, or 43 cents a share, a year ago. Revenue more than doubled, soaring to $1 billion from the year-earlier $496 million. Analysts surveyed by Thomson Financial were looking for a 95-cent profit on sales of $977 million.

"We doubled the size of the Company over the past year and retained our focus on execution and operational discipline," said CEO Todd S. Farha. Medical benefits expense for the third quarter of 2006 was $802.9 million, representing 80.8% of premium revenue, compared with $396.1 million, representing 80.7% of premium revenue, for the same period last year.

For 2006, the company expects to make around $3.35 a share on revenue of $3.7 billion. For 2007, WellCare expects to make $4 a share on revenue of $4.8 billion. Analysts were looking for $2.89 a share on revenue of $3.6 billion for 2006, and $3.40 a share on revenue of $4.4 billion for 2007. Shares were trading up $5.96, or 10.5%, to $63.

Lincare Holdings

(LNCR)

climbed after the Clearwater, Fla.-based company, which provides respiratory-therapy services to patients at home, reported a 4.3% rise in third-quarter earnings.

The company earned $56.22 million, or 57 cents a share, in the quarter, up from $53.87 million, or 52 cents a share, a year ago. The earnings for the latest quarter include a pre-tax, stock-based compensation expense of $5.7 million. Analysts were expecting earnings of 56 cents a share in the most recent quarter.

Second-quarter revenue rose 12% from a year ago to $358 million, in line with analysts' expectation of $358.83 million in the most recent quarter. The rise in revenue was driven by internal growth of 13%, which was offset by a 3% reduction in Medicare prices and a 2% contribution from acquisitions.

Operating margin for the most recent quarter fell 262 basis points to 24.89%. During the third quarter, the company completed the acquisition of two businesses with annual revenue of about $5 million .

Lincare added 13 new operating centers in the third quarter. It said approximately $19.8 million in cash payments were held up due to a hold on all payments to Medicare providers from Sept. 22 through Sept. 30, but later released to the company during the first week of October. Shares were climbing $4.50, or 13.9%, to $37.

Cardiac Science

(CSCX)

sank after the Bothell, Wash.-based defibrillator company missed third-quarter targets. The company lost $298,000, or a penny a share, for the quarter ended Sept. 30, compared with a year-ago loss of $569,000, or 4 cents a share.

Revenue rose to $38.1 million from $27.4 million a year earlier. The two analysts called for a 4-cent profit on sales of $42 million. Inclusive of litigation-related expenses and income taxes, the company said it expects its fourth quarter report to be around break even. Cardiac Science expects revenue growth in 2007 to be around 10%. Shares were tumbling $1.43, or 16.3%, to $7.36.

Answerthink

(ANSR)

plummeted after the technology consulting firm said it expects to delay its third-quarter filing -- and take a fourth-quarter charge -- as it investigates the external misappropriation of funds in the U.K.

The company said a former U.K. agent admitted to misusing about $2 million in funds earmarked for payroll taxes due to the United Kingdom Inland Revenue. The disbursement agent had been used from early 2003 to January 2006 to make payroll, payroll tax and vendor disbursements in the United Kingdom. Answerthink filed a lawsuit in the U.K. against the agent, and certain assets of the agents have been frozen. The former disbursement agent has offered to pledge, as security, assets equal to a significant portion of the company's claim.

The company said it couldn't be certain that its actual exposure is limited to these matters, or the actual exposure for these tax matters will not increase materially from the estimate provided above, or that these amounts will not need to be recorded in prior periods, namely 2003, 2004 and 2005. Answerthink will likely delay filing its third-quarter Form 10 to allow for a proper review of the issues, after which it will decide if a restatement is necessary.

The company said it expects to incur expenses in the fourth quarter as a result of these matters, including increased legal and accounting costs in the quarter and the fees and expenses in connection with the reviews referenced above. But it can't predict the amount of such expenses.

The announcement came as part of Answerthink's third-quarter earnings report. Earnings fell to a penny a share from 5 cents a share a year earlier. Revenue rose 9% to $43.6 million. Answerthink said it expects fourth-quarter revenue of $39 million to $41 million and earnings before items of break-even to 2 cents a share. Shares of Answerthink were trading down 77 cents, or 26.2%, to $2.17.

Guess?

(GES) - Get Report

climbed after the Los Angeles-based apparel company reported a surge in third-quarter earnings.

The company posted net earnings of $48.4 million, or $1.05 a share, up from $20.7 million, or 46 cents a share. Revenue increased 31.3% to $348.7 million. Wall Street was looking for earnings of 72 cents a share on $326.6 million in revenue.

Total October retail sales for the month ended Oct. 28 were $53.5 million, up 17.6% from a year ago. Same-store sales for October increased 11.8%. Looking ahead to fiscal 2007, the company said it expects earnings of $2.75 to $2.85 a share on revenue of $1.30 billion to $1.35 billion. Analysts are calling for a profit of $2.35 a share on $1.28 billion in revenue. Shares were climbing $4.95, or 8.7%, to $61.58.