PacifiCare Stock Goes Up on Word of High Earnings
CYPRESS — PacifiCare Health Systems Inc.’s stock jumped 20% Friday after the company said its second-quarter earnings will be much stronger than expected.
The Cypress health-care company’s stock closed at an all-time high of $32.50, up $5.50 a share in over-the-counter trading. That topped the stock’s previous high of $30.25 reached in October, 1989.
PacifiCare, which owns and operates health maintenance organizations in five states, said it expects to report earnings of between $5.8 million and $7 million for the quarter ended March 31, up from $3.9 million a year earlier. Analysts generally had been expecting earnings of between $4.4 million and $4.9 million.
The company said increases in commercial premiums and lower-than-average hospital use were the primary causes for the increased earnings.
PacifiCare officials said the company has been unaffected by the recession.
“It’s been said that the health-care industry is recession-proof as firms reduce their health-care costs by turning to HMOs and managed health-care plans,” said David K. Erickson, company spokesman.
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