The provider sector of the healthcare industry enjoyed big earnings and revenue gains during the second quarter of this year, according to a financial analysis.
The analysis was conducted for MODERN HEALTHCARE by WDI Capital Markets, a Hilton Head, S.C.-based healthcare advisory and investment banking firm, and KPMG Peat Marwick's Health Ventures practice, based in Atlanta.
Earnings for provider companies soared 24% on a 20.7% increase in revenues in the second quarter of this year compared with the year-ago quarter. Overall, healthcare companies posted earnings growth of 11.8% on revenue gains of 16.2%.
The analysis included more than 850 public companies in three sectors: providers and services; medical devices and supplies; and biotechnology and pharmaceutical.
The healthcare provider industry posted the highest gains. Medical devices and supply companies recorded an 11% earnings increase on a 10% increase in revenues. Biotechnology and pharmaceutical firms saw an 11.8% earnings increase on a 16.2% hike in revenues.
Some of the big winners were firms in practice management, managed care, long-term care and information services.
"We're dealing with companies that have been able to add scale through acquisitions and have been able to put part of it toward the bottom line,"said John W. Cumming, chief executive officer at WDI.
Earnings of publicly held physician practice management firms grew 50.7% on a 33.7% increase in revenues compared with the year-ago quarter. The managed-care sector bumped up its earnings 26% on a 26.2% increase in revenues.