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Tampa Bay companies' quarterly earnings point to slow recovery

Combine the latest cool-to-hot quarterly performances of some major Tampa Bay area companies and what do you get?

A lukewarm regional recovery for the foreseeable future.

Several companies on Wednesday reported challenging financial numbers for the quarter ended Sept. 30. Tampa's WellCare Health Plans, which provides managed-care services for Medicaid customers, cut its 2012 earnings forecast and reported a 57 percent drop in quarterly earnings after suffering a premium hit in Georgia, and high costs hurt its Kentucky operation.

Shares dropped nearly 14 percent to $47.60 Wednesday, making WellCare one of the New York Stock Exchange's biggest decliners of the day.

Tampa staffing company Kforce fared better with improved revenue and earnings over the same quarter in 2011. That was miles ahead of its $33.2 million loss in the second quarter of 2012. But the firm warned that damage from Hurricane Sandy could have a "potentially significant impact" on the last quarter of 2012 since the company derives about 30 percent of its revenue from the mid-Atlantic and Northeast regions.

Kforce shares dropped about 6 percent to $11.15.

"Over the past few quarters … revenue growth has slowed, particularly in our larger accounts, due to the uncertain economic outlook," Kforce CEO David Dunkel said. "Additionally, with productivity levels of our associates near all-time highs, it is increasingly necessary to add resources to sustain and accelerate growth."

Also on Wednesday, TV and Internet retailer HSN Inc. reported a 27 percent drop in earnings, yet still topped analysts' expectations and saw a bump in its daily share price. Since the start of 2012, HSN shares have climbed from under $36 to more than $49.

Other area companies, reporting earlier for the same quarter, ranged in performance. Investment firm Raymond James Financial celebrated record revenues and earnings. But global electronics manufacturer Jabil Circuit was hit by a 28 percent earnings drop. Jabil's Tim Main, who hands over his CEO title in March to chief operating officer Mark Mondello, said the economic climate "remains challenging."

So what's the message in this mixed bag of financial performances?

Overall, the regional economy's moving forward. It's in line with the nation's 2 percent growth rate in the July-September quarter — improving but too weak to significantly boost more hiring.

If area CEOs sound cautious, one Florida economic watcher sees some momentum ahead. After describing the economy as "slumping along" this summer, University of Central Florida economist Sean Snaith's latest forecast, out this week, sees the state "building some steam" in 2013.

"No, really," writes Snaith, as if anticipating his skeptics.

Let's hope the "steam" is more than just economic fog. Florida's jobless rate, now at 8.7 percent, won't fall under 8 percent until late 2014, he predicts. And of all sectors, construction will enjoy the greatest increase, just over 5 percent, between 2012 and 2015.

Says Snaith: "There is definitely a brighter day ahead for the Sunshine State.

"Really, there is."

After what Florida has endured these past six years, who can argue with that?

Robert Trigaux can be reached at trigaux@tampabay.com.

Tampa Bay companies' quarterly earnings point to slow recovery 10/31/12 [Last modified: Wednesday, October 31, 2012 8:35pm]
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