- Why Traders Won't "Touch" This Market
- Europe's Battle In The Credit Crisis
- Why The Rally Failed
- California Screamin': We Need Gov't Loan
- Traders Just Plain Confused
- Worry Is DEFLATION And GE's Credit Market Woes
- What Will Trigger A Broader Rally
- GE, Fertilizer Stocks, Truckers, Autos, And Financials
- GE, Buffett And (Finally) Moving In The Right Direction?
- Short Selling Ban In Financials Likely Extended
- Trading the Volatility
- See What People Are Saying About... Dow 10,000 Breach
- Crisis Outlook for Gold, Euro, S&P 500
- Chadwick: Brace Yourself (And Look to Cash)
- Sports Teams a Tough Sell in Today's Market
- Coldwell Bankers' Home Sale Price Reduction: One Tough Sell
- A Bad Case of the Mondays
- Elite XC Gets "Sliced"
- Warren Buffett and J.P. Morgan: The Return of "Profitable Patriotism" After 101 Years
- As Global Markets Plunge, How Bad Can Crisis Get?
- JPMorgan Froze Lehman Assets Ahead of Bankruptcy
- Like J.P. Morgan, Warren E. Buffett Braves a Crisis
- US Job Market Weakens in September
- Shaky Economy May Last For a While
- Reliant to Seek Strategic Alternatives
- Brazil Stocks Drop 15%, Trading Halted Twice
- Treasury Prices Storm Ahead Amid Safety Stampede
- In Money Markets, Lending Remains Non-Existent
More Videos
Text Size 
We are smack in the middle of earnings warnings season, and it has not been a pleasant experience. Yesterday, after several companies warned, we saw an expansion of new lows at the NYSE. Most large financials, most pharmaceuticals, airlines, and most autos are at or near multiyear lows.
Today, a number of companies are warning once again.
1) In HMOs, Coventry Health [CVH
Loading...
()
] dramatically lowered its guidance--by 46 percent for the second quarter, and by 17 percent for the full year. The problem? It's called the Medical Loss Ratio. Simply put, the difference between the price they are charging and the actual cost of the services are not matching up in the way they had been estimating. This isn't just Coventry's problem; the majority of the big HMOs are also lowering their number due to the same problem.
Coventry is down over 20 percent pre-open. Other managed-care companies like Wellcare [WCG
Loading...
()
] (down 7 percent) and UnitedHealth (down 10 percent) are weaker, however, this morning Aetna--which works in a similar space--affirmed its full year and quarterly guidance. Aetna still down 4 percent.
2) Burlington Northern [BNI
Loading...
()
] became the latest transport company to warn--but this time it wasn't just on higher fuel costs, it was on the severe Midwest flooding, where many of their key tracks are under water. Union Pacific lowered their guidance on Tuesday.
3) Higher raw material costs, like soybean oil and wheat, have hurt Smucker's [SJM
Loading...
()
]. Their earnings were below expectations. And while they have been raising prices, they claim the price increases were not sufficient to maintain profit margins.
4) Chemical giant Huntsman [HUN
Loading...
()
], which learned yesterday that Apollo Management was looking to back out of its $6.5 b takeover offer, said it would fight the effort to quit the deal. Huntsman down almost 40 percent pre-open.
5) Surprise! An LBO! Apria Healthcare [AHG
Loading...
()
], one of the largest home health care firms, is being bought by Blackstone [BX
Loading...
()
] for $1.6 b, that is $21 a share in cash. The deal would be done through a combination of equity from Blackstone and debt financing. Apria closed yesterday at $15.82, so we are talking about a fairly healthy premium of more than 25 percent.
related content |
Questions? Comments?
Del.icio.us
Digg It
Data is a real-time snapshot *Data is delayed at least 15 minutes