After health insurance provider CareFirst strengthened its
) by making a strategic investment of $20 million in the latter,
another independent licensee of the Blue Cross and Blue Shield
Association expanded its partnership with the well-being
solutions provider. However, the stock continued to fall due to
weak fundamentals in the broader industry.
BG MEDICINE INC (BGMD): Free Stock Analysis
COVANCE INC (CVD): Free Stock Analysis Report
HEALTHWAYS INC (HWAY): Free Stock Analysis
PAREXEL INTL CP (PRXL): Free Stock Analysis
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Under the expanded partnership, Blue Cross and Blue Shield of
Alabama will start offering Healthways' SilverSneakers Fitness
Program to its C Plus Medicare Select members in Alabama from
January next year. The association has been offering the
SilverSneakers program to Medicare Advantage members since
January this year.
SilverSneakers Fitness Program is a widely accepted exercise
program specifically tailored for older people. It was founded in
1992 and serves more than 10 million members. The program
involves people in training, aerobic, and flexibility exercises
that lead to improved well-being and lower health care costs.
The recent investment of CareFirst in HWAY is aimed at bringing
further growth and innovation in its Patient Centered Medical
Home (PCMH) program, which serves more than a million members
with an emphasis on patients with multiple chronic conditions.
Healthways provides services and technology to the PCMH program
as well as Disease Management services to CareFirst members. With
the additional investment, the companies expect further
opportunities for growth in PCMH program.
HWAY provides focused and complete solutions which enable people
to improve their physical, emotional and social well-being. Its
fitness center network provides access to more than 15,000
fitness and wellness facilities in the U.S.
In the second quarter of the year, Healthways reported
second-quarter 2013 loss per share of 3 cents, narrower than the
Zacks Consensus Estimate and the company's expectations of a loss
of 5 cents per share. However, the result is worse than the
year-ago earnings of 15 cents per share.
Revenues declined 4.7% year over year to $162.3 million in the
quarter, trailing the Zacks Consensus Estimate of $171 million.
However, upon exclusion of the two terminal contracts, revenues
improved 11.7% from the prior-year quarter.
HWAY affirmed its sales guidance for 2013. The company continues
to expect sales in a band of $710 million-$750 million,
reflecting a rise of 5%-11% year over year. It expects higher
revenues for 2013 despite a drop of $80 million on account of the
termination of two contracts. Healthways forecasts higher sales
in the second half of 2013 as fresh contracts inked in 2012 take
off in the upcoming quarters.
However, Healthways tweaked its outlook for bottom line to
reflect the effect of its cash convertible senior notes due 2018.
The company expects earnings per share of about 18 cents-28 cents
compared with prior outlook of 25 cents-35 cents for 2013.
Healthways currently carries a Zacks Rank #3 (Hold). While we
remain on the sidelines about the company, other scrips that are
worth a look in the medical services industry include
BG Medicine, Inc.
PAREXEL International Corporation
). All of them carry a Zacks Rank #2 (Buy).