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Tokos Medical’s Earnings, Revenue Up in 3rd Quarter

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SPECIAL TO THE TIMES

Tokos Medical Corp., which provides specialized home health-care services to women with high-risk pregnancies, Monday reported increased quarterly revenue and earnings.

During the third quarter of 1991, the company paid $2.2 million to acquire CareLink Corp. in Irvine. In the same period this year, the company spent another $605,000 (after accounting for income-tax benefits) to acquire Medical Resource Management, which has operations in North and South Carolina.

Taking those transaction costs into account, the company’s earnings were $2.5 million, or 14 cents a share, for the third quarter this year, up 9% from a profit of $2.3 million, or 13 cents a share, a year earlier. Revenue was $44.4 million, up 36% from $32.7 million.

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The company attributed the gains to price increases for its services as well as an increase in the number of patients who need preterm-labor management services.

Despite the improved quarterly performance, Tokos’ stock was off more than 18% Monday, falling $4.13 a share to close at $18.63 in trading on the NASDAQ market.

Nicholas Mione, the company’s vice president of finance, noted that while the quarterly results were within the range of analysts’ expectations, they were at the low end. As a result, one analyst revised an earlier “buy” rating on Tokos’ stock to a “hold,” Mione said, which may have caused the share price to fall.

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Dorothy Ryan at the brokerage Robertson Stephens in San Francisco said of the stock-price decline: “I think it is an utterly ridiculous overreaction to not-quite-as-robust sales in the first two weeks of October.

“Their quarter was fine,” Ryan said, “but management commented that the first two weeks in October were a little weaker than budget.” That caused some analysts to downgrade their income projections for the year, making investors nervous, she said.

The quarterly results pushed earnings for the first nine months of the year to $8 million, or 46 cents a share, up 43% from $5.6 million, or 32 cents a share, for the same period a year earlier. Nine-month revenue was $124.3 million, up from $89 million.

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