Updated from 2:40 p.m. EDTShares of Tenet Healthcare ( THC - Get Report) were among the worst-performing health and pharmaceutical stocks Monday, falling 8.1% after the company issued profit warnings for the fourth quarter and 2005. The hospital operator said its fourth-quarter results would be wider than its third-quarter loss of 8 cents a share. Analysts surveyed by Thomson First Call had been expecting a loss of 4 cents a share. Looking ahead, Tenet said that 2005 results would "remain under pressure." As a result, the company does not expect 2005 operating income to exceed break even, "with likely performance to fall in a range between the company's recent performance and break even," it said. Analysts had been expecting 2005 earnings of 11 cents a share on sales of $10.4 billion. Tenet blamed, among other things, lower patient volumes and high levels of bad debt from uninsured and underinsured patients for its outlook. Shares traded down 97 cents to $11.07. Cardinal Health ( CAH - Get Report) fell 1.8% after the company said it plans to cut 4,200 jobs and warned that 2005 earnings growth would be slower than expected. The restructuring will take place over a three-year period and involve two phases, it said. The company expects phase one to add $200 million to operating income in 2006 and the second phase to add $250 million to $350 million in operating income. Excluding items, Cardinal said it expects earnings to be down 15% during the first half of 2005 and expects full-year earnings to grow in the low single digits. Previously, Cardinal said it would grow 2005 earnings by at least 10%. Analysts are expecting 2005 earnings of $3.48 a share on sales of $73.6 billion. Shares traded down $1 to $55.76. Shares of Discovery Laboratories ( DSCO) rose 5.3% after the company said its Surfaxin drug showed a survival benefit over comparable treatments. The company said that premature babies treated with Surfaxin, which is an engineered version of natural human surfactant, had a 17.8% mortality rate at day 28 compared with a 21.5% mortality rate vs. Survanta and Curosurf, which are animal-derived surfactants. The data were derived from two phase III trials, the company said. Shares traded up 46 cents to $9.14.
Lincare Holdings rose 2.8% after the respiratory therapy services company's board authorized a $250 million share repurchase plan. Purchases will be made through the open market or through privately negotiated transactions, the company said. Shares traded up $1.08 to $39.44. Other health care volume movers included Pfizer ( PFE - Get Report), up 7 cents to $27.16; EntreMed ( ENMD), up 83 cents to $3.43; Nanogen ( NGEN), up $1.70 to $7.86; Merck ( MRK), up 31 cents to $29.05; Guidant down 65 cents to $70.90; and Johnson & Johnson ( JNJ), up 39 cents to $60.64.