Vital SignsFollowing a profit warning last week, HCA posted first-quarter earnings of 69 cents a share, falling a penny shy of the latest consensus estimate. The company, which ranks as the largest for-profit hospital chain in the country, blamed a spike in bad debt provisions -- which shaved 26 cents from first-quarter earnings -- for the shortfall. "Aside from the significant increases in uninsured-patient volumes and bad debts, results for the quarter were quite positive," stated HCA CEO Jack Bovender. "We were particularly pleased with the improved volume trends in both our inpatient and outpatient services. ... Long term, we remain confident that our existing assets, market locations and our reinvestment strategy will produce solid returns for our shareholders."
Another MissLess surprising, perhaps, was the latest earnings miss from Schering-Plough. The big drugmaker posted a nickel loss instead of the penny gain Wall Street had expected. But the company has delivered a series of negative surprises since one of its biggest prescription drugs -- allergy-reliever Claritan -- became available over the counter. The company is now relying on a new cholesterol drug, created through a partnership with Merck, to help fuel its turnaround. The new drug, Vytorin, has already received marketing approvals in both Germany and Mexico and is set for a U.S. launch in the second half of this year.
In the meantime, however, the company continues to struggle."Schering-Plough's first-quarter results reflect the serious challenges facing the company," acknowledged CEO Fred Hasson. "We are investing for the future even as we recognize that short-term comparisons may suffer." The company's stock slipped 4 cents to $17.02 on Thursday's financial update. Still, even a bearish analyst saw positives in the report. James Kelly of Goldman Sachs said that Schering-Plough's first-quarter revenue of $1.96 billion beat his own estimate. And he even viewed the company's spending -- which came in higher than expected -- as justified. He also predicted that the spending trend will continue for the next two years. "We believe that it is the right prescription to fix a global R&D