Home health stocks trail robust national indices; Service Master comes in as one of the largest dollar and percent gainers in FY98
National indices, headlined by the Internet-infatuated Nasdaq Composite Index, led the market to a robust close at year's end with the addition of almost 40% for the year at the close of trading on Dec. 31. Though the Dow Jones Industrial Average fluctuated before close, it ended the quarter at 9181.43, an increase of 1338.81 points, or 17.07%, to post an overall gain of 16.10% for the year. The S&P 500 Index, a broad measure of the market, ended up over 20% for the quarter and more than 26% for the year.
Although trading was mixed, overall market breadth showed substantially more gains than losses. The same was not true, however, for the Home Health Industry Stock Index, as it lost 246.52 points, or 29.94%, to end the year at 351.88. In total, 30 issues declined this year, compared to advances by six companies.
Service Master was one of our largest dollar and percentage gainers this year, adding 2.56 points, or 13.14%, closing out the year at $22.06. The company announced that its directors approved a 1Q98 cash dividend of 9 cents per share, payable on Jan. 29, 1999, to shareholders of record as of Jan. 15, 1999. Said Service Master CEO Carlos H Cantu, "In approving the company's 29th consecutive annual dividend increase, the ServiceMaster Board of Directors has demonstrated its confidence in the ongoing strength of our enterprise. Our consistency in dividend increases reflects outstanding overall financial performance, which has been well above market averages."
American Home Patient (AHOM; Brentwood, TN) was zapped in the quarter ended Sept. 30 with a $15.2 million charge for particular non-recurring third quarter events, resulting in a net loss of $9.9 million, compared to a net loss of $40.2 million in the previous year's quarter, including an accounting charge of $67 million. The result is a net loss of 66 cents per share for 3Q98, compared to a net loss of $2.70 per share recorded in the same quarter last year. AHOM was one of our largest dollar and percentage losers, down 21.69 points for the year, or 92.29%. The company ended 1998 at $1.81.
Pediatric Services of America (PSA; Norcross, GA) also suffered declining fortunes for the year, its stock off 81.70%, or 15.63 points, to end at $3.50. Although the company's net revenues surged 54.1% over the previous year's fourth quarter, to record highs, PSA announced a net loss for 4Q98 of $639,000, 9 cents per share, compared to net income of $2 million, 31 cents per share, for 4Q97. Commenting on the results, President/CEO Joseph Sansone said, "In the fourth quarter, we focused on the initiatives related to the revenue and collection shortfalls that affected our third quarter earnings. During the fourth quarter, we closed or merged thirteen locations, reduced corporate and field staff, added sales associates in key markets and instituted aggressive collection procedures in our managed care and medicaid payor groups. Additionally, we strengthened field management and have started the upgrading process throughout our receivables department."
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