Health care companies reported mixed vital signs on Monday.

Two big managed care players, Humana ( HUM) and Coventry ( CVH), took a healthy bounce after beating second-quarter profit expectations and issuing upbeat forward guidance. But HCA ( HCA) slipped after failing to meet even recently lowered expectations as the company continues to struggle in a particularly tough hospital environment. WellPoint ( WLP) and Anthem ( ATH) also fell due to complications that are now threatening a merger of the two giant health insurers.

Humana began the day as the strongest performer of the bunch, jumping 5% to $17.90 at the open after posting second-quarter operating profits of 46 cents a share that beat the consensus estimate by 4 cents. The company also predicted that full-year profits would surpass the current estimate of $1.61 a share and come in at between $1.63 and $1.67 instead.

"The benefit of Humana's diversification among multiple lines of business is evidenced in this quarter's record results," stated Humana CEO Michael McCallister. "The continued success we are experiencing with our traditional commercial and government products, combined with favorable results from and growing acceptance of our cutting-edge consumer strategy, are leading to record earnings for 2004."

Humana's second-quarter revenue, totaling $3.43 billion, also topped the consensus estimate of $3.36 billion. But the company is now forecasting full-year revenue of $13 billion; that's $110 million shy of current expectations.

Goldman Sachs analyst Matthew Borsch spotted other signs of weakness. Specifically, he pointed to Humana's commercial insurance segment -- where both pricing and enrollment are vulnerable -- as an ongoing area of concern.

"Humana has strongly emphasized it is maintaining price discipline, which is leading to attrition within its commercial risk book," Borsch acknowledged. But "while we like strong pricing discipline, we also believe some pricing concessions are unavoidable in this environment."

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