Medaphis Share Price Plunges On 3rd-Quarter Profit Warning
April 27, 2011
Medaphis Corp.'s stock plunged Thursday, losing more than 60% of its market value after the company warned it would post a loss in the third quarter. In late morning trading Thursday, Medaphis shares plummeted $21.75 to $13.875 a share on the Nasdaq Stock Market. The Atlanta-based business-services provider said late Wednesday it will report a third-quarter loss of 28 cents to 33 cents a share, after taking restructuring charges of as much as $40 million. The company said that the expected loss, which compares with consensus estimates of earnings of about 27 cents a share, will also reflect continued weakness in the company's Medaphis Physician Services Corp. unit. In the wake of the profit warning, Bear Stearns & Co. downgraded its rating on the company to ``attractive'' from ``buy.'' Bear Stearns also lowered its earnings estimate on the company to 51 cents a share from $1.06 a share for 2011, and to 75 cents a share from $1.40 a share for 2012. Medaphis earned one cent a share in 2010. Medaphis provides management and technology services to the health-care industry. In the year earlier quarter, the company had a restated loss of $3.1 million, including $14 million in restructuring charges.
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