Health Stocks in Motion

Updated from 3:32 p.m. EDT

Shares of PDI ( PDII) were among the worst-performing health-related stocks Tuesday, falling 22.3% after the company slashed its 2005 earnings and sales outlook.

The provider of outsourced sales and marketing services to the health care industry now expects earnings of 40 cents to 50 cents a share on sales of $310 million to $320 million, well below the $1.35 to $1.45 a share in earnings and $380 million to $390 million in sales previously forecast. Analysts polled by Thomson First Call had been expecting earnings of $1.36 a share on sales of $380.2 million. PDI blamed the poor outlook on anticipated new business wins that have not materialized, an unexpected cancellation of a contract with Novartis Pharmaceuticals -- a division of Novartis ( NVS), higher costs related to the company's decision to add key resources to its business and concerns regarding the continuation of one contract for 100 representatives. Shares traded down $4 to $13.96.

Caremark Rx ( CMX) fell 3.3% despite posting solid first-quarter results and raising its 2005 operating profit estimate. The manager of prescription benefits posted earnings of $197.5 million, or 43 cents a share, on sales of $8.38 billion. Results included a charge of $1.2 million. Analysts were expecting earnings of 43 cents a share on sales of $8.04 billion. Looking ahead, Caremark forecast second-quarter earnings of 45 cents to 46 cents a share, in line with expectations. For all of 2005, it forecast operating earnings of $1.92 to $1.94 a share, up from previous guidance of $1.88 to $1.92 a share. Analysts are expecting earnings of $1.91 a share. Shares traded down $1.33 to $38.79.

Despite posting a first-quarter sales shortfall, shares of Odyssey HealthCare ( ODSY) rose 7.1%. The hospice care provider posted earnings of $5.3 million, or 15 cents a share, on sales of $87.8 million. First-quarter results were negatively affected by a $2.2 million accrual for the Medicare payment cap. Analysts were expecting earnings of 18 cents a share on sales of $89 million. Cash flow from operations during the quarter was $14.3 million. A year ago the company earned $7.9 million, or 21 cents a share, on sales of $84.7 million. Shares traded up 80 cents to $12.15.

Health Net ( HNT) fell 3.6% after the insurer posted first-quarter earnings that were ahead of expectations but said that second-quarter earnings would be a penny shy. The company earned $21.3 million, or 19 cents a share, on sales of $2.91 billion. Results included charges that amounted to $67 million, or 36 cents a share. Without the charges, the company would have beat expectations by 2 cents a share. Analysts were expecting earnings of 53 cents a share on sales of $2.88 billion. Looking ahead, Health Net forecast second-quarter earnings of 50 cents to 55 cents a share. Analysts are expecting earnings of 56 cents a share. Shares traded down $1.24 to $32.94.

Shares of Amedisys ( AMED) rose 10.5% after the company posted first-quarter results that exceeded expectations and raised 2005 earnings guidance. The home health nursing company posted earnings of $7.1 million, or 45 cents a share, on sales of $70.4 million. Analysts were expecting earnings of 41 cents a share on sales of $69.1 million. Amedisys said that strong internal growth of Medicare admissions contributed to its first-quarter earnings beat. Looking ahead, the company now expects 2005 earnings of $1.75 to $1.81 a share, up from previous guidance of $1.71 to $1.77 a share. Sales are expected to exceed $300 million. Analysts are looking for earnings of $1.77 a share on sales of $304.1 million. Shares traded up $3.21 to $33.84.

Other health care volume movers included Elan ( ELN), down 42 cents to $6.29; Pfizer ( PFE), up 9 cents to $27.50; Teva ( TEVA), down 35 cents to $30.79; Amgen ( AMGN), down 59 cents to $58.15; Merck ( MRK), up 42 cents to $34.42; Genentech ( DNA), up $2.96 to $73.24; Johnson & Johnson ( JNJ), down 5 cents to $68.73; Gilead Sciences ( GILD), up $1.04 to $38.84; and Schering-Plough ( SGP), down 14 cents to $20.80.

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