Healthcare Stocks Slightly Lower; Health Management Associates' Board OKs Community Health Buyout


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Healthcare stocks are narrowly lower, with the NYSE Healthcare Sector Index slipping about 0.1% and shares of healthcare companies in the S&P 500 declining about 0.1% as a group.

In company news, Health Management Associates ( HMA ) is ahead nearly 6% at $13.27 a share in early afternoon trade after saying its board is recommending that shareholders vote in favor of a $7.6-billion buyout proposal from Community Health Systems ( CYH ), accepting either $10.50 in cash or 0.06942 of a CYH share as well as a Contingent Value Right - worth up to $1 per share - in exchange for each share they now own.

CYH was also higher in early trade, rising 2.5% to $43.38 a share.

HMA also reported a Q3 loss of $0.01 per share, reversing a $0.22-per-share profit during the same quarter last year and missing the Capital IQ consensus call looking for a $0.15 per share quarterly gain.

Revenue, before provisions for doubtful accounts, rose 0.6% year over year to $1.67 billion, matching analyst expectations.

Looking forward, the owner and manager of hospitals and ambulatory surgery centers said it is now expecting FY13 net revenue, before provisions for doubtful accounts, of between $6.84 billion to $6.86 billion, trailing estimates by at least $40 million, or less than 0.6%. EPS is projected in a range of $0.48 to $0.50, also lagging the analyst consensus by at least $0.10 per share.

In other sector news,

(+) SVA, (+5.3%) Chinese drug-maker earns $0.04 per share in Q3, reversing year-ago net loss of $0.05 per share and topping analyst estimates expecting a $0.02 per share loss. Sales increase 54.5% year over year to $22.1 mln, topping consensus view by $4.08 mln.

(-) CHTP, (-6.9%) Prices offering of 6.66 mln shares at $3 each, a 9% discount to Tuesday's closing price. Deal generated $20 mln in gross proceeds, which will be used to seek regulatory approvals and fund commercialization of its droxidopa drug candidate.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: CYH , HMA

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