TriCare Stock Plunges After Glum Earnings Forecast

TriCare Inc., citing growing uncertainties and discontent with the state’s workers’ compensation system, said Thursday that it expects to show lower earnings next fiscal year.

That gloomy prediction by the Irvine-based occupational health care services firm, which operates 44 workers’ compensation rehabilitation and treatment clinics around the state, sent its stock plunging more than 30% in value on the aNASDAQ market.

“Our stock was pounded,” said Chief Executive Steve Bullock on Thursday afternoon. “At least the market is closed now.”

In announcing its first-quarter earnings for the 1992 fiscal year, which ended Aug. 31, the company said it has pared down, laying off 35 workers, about 8% of its 430 employees, and is making changes in the way it evaluates injured workers.

Those changes will cut into both revenue and earnings, Bullock said.

“Workers’ compensation, right now, has been receiving a lot of (negative) attention,” Bullock said. “And justly so. There are some big problems in it and employers are upset about the costs. As an employer, I am too.”

Despite the prediction of lower earnings, TriCare reported that its quarterly profits were up 7.5%, to $912,000 from $848,000. But per share profit of 12 cents was down from 13 cents in last year’s first quarter on lower revenue.

For the first quarter, the company reported revenue of $10.8 million, down 6% from $11.5 million for the same period last year.

The announcement that the company would see slower earnings and revenue in the coming year sparked a selloff on Wall Street. TriCare’s stock price fell in trading Thursday to $4.25, down 30.6% from Tuesday’s close of $6.13 a share.