Aetna Exits from Health Exchanges; Teva Tumbles on Lower Outlook

Mukesh Buch
03 Aug, 2017
New York City

Aetna lifted fiscal outlook and announced to leave U.S. managed healthcare exchanges. Apache net swung to profit. Becton Dickinson net swung to a loss. Cognizant net surged on strong demand in cloud services. DISH Network net tumbled. Teva Pharma net swung to a loss of $6 billion.

[R]12:30 PM New York – Aetna lifted fiscal outlook and announced to leave U.S. managed healthcare exchanges. Apache net swung to profit. Becton Dickinson net swung to a loss. Cognizant net surged on strong demand in cloud services. DISH Network net tumbled. Teva Pharma net swung to a loss of $6 billion.[/R]

Tollbooth Index decreased 15.16 to 12,398.90.

Earnings Review

Aetna Inc ((AET)) jumped 4.4% or $6.76 to $161.50 after the diversified healthcare services provider reported total revenues in the second-quarter ending in June fell 3% from a year ago to $15.5 billion.

Net income in the quarter soared 52% to $1.2 billion or $3.60 per diluted share from $791 million or $2.23 in the same quarter last year.

Aetna forecasted fiscal 2017 revenues of about $61 billion and net income of about $1.8 billion and earnings per share in the range of $5.46 to $5.56.

Apache Corporation ((APA)) slumped 5.2% or $2.49 to $45.42 after the oil and gas explorer said total revenues in the second-quarter ending in June were flat from a year ago to $1.4 billion.

Net in the quarter swung to profit of $572 million or $1.50 per diluted share from a loss of $244 million or 65 cents in the same quarter last year.

Becton Dickinson and Co ((BDX)) dropped 2% or $4.06 to $196.87 after the medical diagnostic products maker reported revenues in the third-quarter ending in June slumped 5.1% from a year ago to $3 billion.

Net in the quarter swung to a loss of $165 million or 75 cents per diluted share from profit of $390 million or $1.80 in the same quarter last year.

The medical technology provider forecasted fiscal 2017 revenues to fall between 3% and 3.5% from the earlier estimate of a decline between 3.5% and 4% and estimated diluted earnings per share in the range of $5.10 to $5.15, an increase of 14% to 15%.

Cognizant Technology Solutions Corp ((CTSH)) slid 6 cents to $68.46 after the professional services provider said revenues in the second-quarter ending in June soared 8.9% from a year ago to $3.7 billion.

Net income in the quarter surged 86.5% to $470 million or 80 cents per diluted share from $252 million or 41 cents in the same quarter last year.

The IT services provider said profit surge was mainly driven by strong increase in demand in cloud-based services and specifically from the clients of financial and healthcare.

In the third quarter, Cognizant forecasted revenues in the range of $3.73 billion to $3.78 billion and diluted earnings per share in the range of at least 94 cents.

In fiscal 2017, the professional services provider estimated revenues in the range of $14.70 billion to $14.84 billion and diluted earnings per share of about $3.67.

DISH Network Corp ((DISH)) slipped 1.6% or $1.04 to $62.96 after the pay television and broadband services provider said revenues in the second-quarter ending in June declined 5.7% from a year ago to $3.6 billion.

Net income in the quarter tumbled 90.5% to $40 million or 9 cents per diluted share from $424 million or 91 cents in the same quarter last year.

The cable service providers said profit in the quarter was negatively impacted by litigation expenses and net related taxes of about $280 million.

DISH said gross new Pay-TV subscribers dropped to 444,000 from 527,000 gross in a year ago period. Net Pay-TV subscribers declined to about 196,000 in the quarter from 281,000 in the second quarter of 2016.

Global Payments Inc ((GPN)) decreased 1.1% or $1.04 to $94.35 after the payment technology provider stated revenues in the second-quarter ending in June soared 14.2% from a year ago to $962.2 million.

Net income in the quarter jumped 7.5% to $66.9 million or 44 cents per diluted share from $62.2 million or 42 cents in the same quarter last year.

The payment technology provider forecasted net revenue in fiscal 2017 in the range of $3.40 billion to $3.48 billion, or growth of 20% to 22% over 2016.

Operating margin is expected to expand as much as 120 basis points and earnings per share in the range of $3.85 to $4.00, reflecting growth of 21% to 25% from a year ago period.

Intercontinental Exchange Inc ((ICE)) dropped 3.1% or $2.05 to $64.97 after the regulated exchanges operator said total revenues in the second-quarter ending in June were flat from a year ago at $1.5 billion.

Net income in the quarter soared 17.1% to $418 million or 70 cents per diluted share from $357 million or 60 cents in the same quarter last year.

Kellogg Company ((K)) jumped 4.6% or $3.14 to $70.60 after the ready-to-eat cereal and convenience foods maker reported net sales in the second-quarter ending on July 1 fell 3% from a year ago to $3.2 billion.

Net income in the quarter rose 0.7% to $282 million or 80 cents per diluted share from $280 million or 79 cents in the same quarter last year.

Kellogg said sales fell in the United States due to lower sales on morning foods and in the snacks segment sales were flat.

The cereal maker reaffirmed fiscal 2017 net sales forecast of 3% decline and earnings per share growth of 8% to 10%.

Teva Pharmaceutical Industries Ltd ((TEVA)) tumbled 20% or $6.22 to $25.02 after the Israel-based pharmaceutical products maker said revenues in the second-quarter ending in June surged 13% from a year ago to $5.7 billion.

Net in the quarter swung to a loss of $6 billion or $5.94 per diluted share from profit of $188 million or 20 cents in the same quarter last year.

Teva said gross profit margin in the quarter declined 49.6% from 57.1% and research and development expenses soared 30% to $486 million from a year ago period and selling and marketing expense increased 1% to $960 million.

Teva lowered fiscal 2017 revenues forecast to between $22.8 billion and $23.2 billion from the earlier estimate of $23.8 billion to $24.5 billion and operating income to decline to between $6.6 billion and $6.8 billion from the earlier forecast of $7.4 billion to $7.8 billion.