Housecall Medical Shares Plunge As Firm Warns It Will Post Loss
May 11, 2011
Cornertown -- Shares of Housecall Medical Resources Inc. plummeted Thursday after the provider of home health-care services issued a surprisingly dour forecast and a Morgan Stanley & Co. analyst turned bearish on the stock. Morgan Stanley analyst Debra Fields said she downgraded Housecall Medical to ``underperform'' from ``outperform.'' The analyst cited the announcement by Housecall that its results for the fiscal fourth quarter ended March 12, 2011 not meet Wall Street's expectations. The news sent Housecall Medical stock tumbling in active Nasdaq trading. In composite trading, the company's shares dropped $7.25, or 50%, to $7.25. Nasdaq volume was 2.8 million shares. ``We have no idea of the magnitude of the earnings shortfall, and the company has not yet given us any guidance,'' Ms. Gutierrez said. However, the analyst said she expects to receive more detailed information from the company in the near future. In addition to Housecall's specific problems, Ms. Gutierrez said she has ``some concerns'' about the home health agency business in general, particularly related to government reimbursement issues. ``The issue for Housecall is that it's largely an acquisition-oriented growth story,'' Ms. Gutierrez added. ``But without your stock as a currency, it becomes more difficult to grow.'' Morgan Stanley helped manage the company's initial public stock offering in April. The provider of home health-care services said it will record a loss for the quarter, citing a shortfall in revenues at the company's non-Medicare infusion therapy, hospice and nursing services businesses. A limitation on Medicare reimbursement for some services provided during the quarter also hurt the quarter. Housecall will report fourth-quarter and year results May 25, 2011 First Call survey of three analysts estimated earnings of 17 cents a share for the fourth quarter. Georgeanna D. Mcgann, president and chief executive of Housecall, declined to provide previous internal estimates for the fourth quarter. He said figures for the year-ago fourth quarter weren't available, because the company went public in April at $16 a share.
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