Profits jumped 16.8% for healthcare companies in the first quarter of 1995 as providers led the growth curve with a 33% leap in earnings.
The figures were compiled by WDI Capital Markets, a Hilton Head Island, S.C.-based investment banking firm. The results are based on financial reports for 700 investor-owned companies. Earnings are adjusted for one-time charges, such as accounting adjustments, restructurings and write-offs.
Results among healthcare companies in general were significantly higher than 1994's fourth quarter and third quarter, when adjusted earnings increased 10.8% and 14.3%, respectively.
The providers group outpaced the earnings growth of medical suppliers and pharmaceutical groups. Providers and healthcare service companies are "the bellwether by which future industry performance will be judged," said John W. Cumming, WDI's president.
Hospital companies' 33% growth in adjusted earnings came on a 26% increase in revenues.
Other provider segments reported even higher earnings increases: 125% for outpatient services, 57% for home-care companies and 49% for long-term-care firms.
Among managed-care companies, earnings growth slowed to 20% on a 28% increase in revenues. In the fourth quarter of 1994, they reported a 36% increase in adjusted earnings.