Saturday, May 26, 2018
Business

Tampa Bay's early 2016 corporate earnings influenced by flu, gas prices, Zika threat

One company laments (financially, at least) a lack of flu. Another celebrates low gas prices. And one will be grilled about a mosquito.

In keeping with the brutal start of 2016 for the stock market and an economy where analysts wonder if a recession lurks around the next corner, prominent companies in Tampa Bay so far are reporting a wide range of quarterly performances. Consider these samples:

Community Health Systems Inc. saw Tuesday's Dow soar 200-plus points, yet watched its own stock plummet, wiping out more than 22 percent of the giant hospital chain's market value. Why? The company on Monday reported an unexpected fourth-quarter loss as admissions were hurt by falling numbers of patients during a slow flu season. The Franklin, Tenn., chain, the country's second-largest chain of for-profit hospitals, includes the seven-hospital Bayfront Health Network in St. Petersburg and nearby cities along the Gulf Coast.

Total hospital admissions fell 3.6 percent from a year earlier. Net operating revenues fell 2.4 percent to $4.8 billion. The hospital chain attributed the declines to unseasonably warm winter weather and a well-matched vaccine this year to help fend off the flu virus. Analysts blamed the company's purchase and subsequent inability to turn around flagging Health Management Associates, the Naples-based chain that bought Bayfront Medical only to be acquired shortly thereafter by Community Health.

Speaking on an analysts call Tuesday, Community Health CEO Wayne Smith called 2015 "a difficult year for us, not the year we expected." He said he expects the company's strategic direction will ultimately pay off.

Any rebound is a ways off. Company shares are down more than 75 percent from a June 2015 high.

At Clearwater-based MarineMax, the nation's largest boat retailer, executives cheered quarterly profits of $889,000 on revenues of $169.5 million. That profit topped analysts' forecast of a loss for the company in a recreational boating industry badly beaten up since the recession.

MarineMax CEO Bill McGill told analysts this month that he and his team "struggle" to understand how oil has a negative impact on the economy. "I think that oil prices would have to have a much greater impact on our economy positively in people's wallets than the damage that's being done to the oil industry by being down," he said. "Our middle-class Americans have more discretionary dollars in their wallets as they are spending less for heating oil and less at the gas pump." And more, it seems, on boating.

Tampa's WellCare Health Plans, a provider of Medicare and Medicaid coverage, also beat Wall Street Expectations in its latest quarter. CEO Ken Burdick spoke of a "more disciplined approach to running the business" and cited recent contract and renewal wins in several states. He also noted the failure to win a Nebraska Medicaid contract and discussed a controversy involving an Iowa Medicaid contract, awarded and then taken away, over questionable bidding behavior by the company. WellCare contested the loss of the contract, but a district court judge in Iowa this week sided with state officials. So far this year, WellCare's stock price has defied the stock market's general malaise, closing Tuesday at a 2016 high so far of $82.28.

Plenty more companies with significant Tampa Bay operations will be reporting their quarterly numbers and defending their performance in the coming days. Panama's Copa Airlines, for example, will report figures late today and faces analysts worried about two concerns: the Latin American recession and, no less ominous, the clear threat of the Zika virus coming to Tampa and other U.S. destinations aboard Copa flights.

"The spread of the disease," says a Zacks Equity Research preview of Copa's earnings, "has been alarming."

Contact Robert Trigaux at [email protected] Follow @venturetampabay.

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