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Sector Update: Healthcare

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Healthcare stocks were narrowly lower, with the NYSE Healthcare Sector Index slipping 0.1% and shares of healthcare companies in the S&P 500 declining 0.2% as a group.

In company news, Health Net ( HNT ) Wednesday rallied to a six-year high, brushing aside Q1 financial results trailing analyst expectations and the managed-care provider's cutting its forecast for FY14 per-share earnings and revenue.

HNT shares were ahead more than 8% at $36.89 each in recent trade, just 2 cents off their session high and matching their best price since February 2008. Through Tuesday's close, the stock was up 21% over the past 12 months.

Net income during the three months ended March 31 fell to $28.8 million, or $0.36 per share, down from $50.1 million in the prior year period. Excluding pretax litigation costs and other one-time items, HNT earned $0.39 per share, lagging the Capital IQ consensus by $0.03 per share.

Total revenue climbed 8.6% year over year to $3.04 billion, missing the Street view by around $260 million.

Looking forward to the 12 months ending in December, the company reduced its outlook for FY14 revenue by $400 million from its previous forecast, now projecting around $14 billion. Analysts, on average, have been expecting $14.4 billion in revenue this year.

HNT also said it continues to expect per-share earnings of $3.00 or more, including a $60 million tax benefit. Excluding the tax benefit, the company is projecting EPS of at least $2.22 - trailing the consensus view by $0.15 per share.

In other sector news,

(+) GALE, (+4.5%) Q1 net loss of $0.02 per share tops estimates by $0.08. Revenue of $2.2 mln beats by $120,000. Expects FY14 revenue from sales of its Abstral cancer-related pain treatment in a range of $11 mln to $15 mln. Street is at $13.50 mln.

(-) AVNR, (-6.5%) Reports Q2 net loss of $0.08 per share, in-line with the Capital IQ consensus. Q2 revenue climbs 54.6% over the same quarter last year to $26.95 mln, narrowly topping estimates by around $310,000.

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

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