(FOOL GLOBAL WIRE) LEXINGTON, Ky. (June 4): Today's IFG news was dominated by the two Healthcare Services companies: United Healthcare <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:UNH)") else Response.Write("(NYSE:UNH)") end if %> and RoTech Medical <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:ROTC)") else Response.Write("(NASDAQ:ROTC)") end if %>.
United Healthcare was beaten about the head and shoulders by Wall Street (down 4.5%) after CEO Dr. William McGuire commented that premiums for the largest U.S. managed care concern are rising more rapidly than expected. As a result, the company's earnings growth has been slowed. But McGuire sees the trend changing.
McGuire outlined some of the cost elements: Pre-renewal premium rate increases were about 0.5 percent in January, but climbed to 6.7 percent in May. Healthcare cost increases remain in a moderate range of about 2.0 percent for in-patient programs, while out-patient costs are rising faster. And drug costs are "dramatically higher." McGuire declared that "prescription drug costs are not being adequately controlled."
The other half of our medical stock news produced virtually no movement in the stock. RoTech Medical dropped only a quarter of a point after announcing its third-quarter earnings were $0.22 per share compared to $0.17 in the year-ago period, exactly in line with First Call's consensus estimate. For the quarter, net income jumped 62% and operating revenue climbed 108%
That's all on the Investing For Growth front. Keep in mind that the monthly update for the Relative Strength variation takes places this weekend. And Todd Gunerman's IFG Scan variation was updated this past weekend. For details, check out the IFG Statistics Center for those weekly files.
Transmitted: 6/4/96 | ||||||||
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