PACIFICARE SHARES PLUNGE; EARNINGS TO FALL SHY OF EXPECTATIONS.Byline: Aimee Sullivan Bloomberg News PacifiCare Health Systems PacifiCare Health Systems (former NYSE: PHS) was a Fortune 500 healthcare company based in Cypress, California. It was acquired by UnitedHealth Group (NYSE: UNH) in late 2005, which continues to market health plans under the PacifiCare name. Inc. shares tumbled more than 20 percent after the company said second-quarter earnings will miss estimates as newly acquired FHP fhp or f.hp. abbr. friction horsepower International Inc. fails to meet expectations. The fifth-largest U.S. provider of group health-care plans said sales were lower than expected in several markets operated by Woodland Hills-based FHP, which it bought in February for $2.1 billion. Sales were also slower in California during May, the company said. The announcement prompted worries that PacifiCare is having trouble integrating FHP. The problems in California might also portend por·tend tr.v. por·tend·ed, por·tend·ing, por·tends 1. To serve as an omen or a warning of; presage: black clouds that portend a storm. 2. an industrywide slowdown, analysts said. The company's Class A voting shares Voting Shares Shares that give the stockholder the right to vote on matters of corporate policy making as well as who will compose the members of the board of directors. Notes: Different classes of shares, such as preferred stock, sometimes don't allow for voting rights. fell 17 -1/4, or 21 percent, to 63 -3/4, and the nonvoting Class B shares fell 18 -3/4, or 22 percent, to 66 -3/4, an 11-month low for both classes. PacifiCare was expected to earn $1.16 a share in the quarter ending June 30, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a survey of 21 analysts by IBES IBES See: Institutional Brokers Estimate System International Inc. PacifiCare earned $1.01 in the year-ago quarter. The company said earnings will be ``substantially lower'' than that estimate. It didn't say why sales were slower than expected. PacifiCare officials declined to comment further, saying it will have a teleconference later in the week. Also, shares of Woodland Hills-based WellPoint Health Networks Inc., fell 1 -3/8 to 46 -1/4. Foundation Health Systems Inc., also based in Woodland Hills, dropped -7/8 to 31 -1/2. A profit warning by Humana Inc. a year ago touched off a spree of similar announcements by health maintenance organizations. Shares in companies dropped, and have recovered only in recent months. |
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