Tokos Medical Stock Takes 21% Plunge as Revenue Falls Short of Expectations

Tokos Medical Corp.’s stock tumbled 21% Thursday after the company reported that it took in $5.5 million less in revenue last year than expected.

Tokos, which provides specialized home health care services to women with high-risk pregnancies, said its annual profit increased to $6.5 million, or 37 cents a share, from $2.4 million, or 14 cents a share, for 1991.

Revenue rose as well, to $159.9 million for 1992 from the previous year’s $125.1 million. Even with that boost in revenue, though, the company fell short of earlier projections, causing its stock to plunge $1.75 a share to close at $6.75 in heavy trading on the NASDAQ market.

Tokos did not break out fourth-quarter results, which it said will be determined after an analysis of its revenue adjustment.

Tokos spokesman Tom Gavin attributed the company’s failure to meet expectations to a gap between bills sent out to health insurance companies and money eventually received. Some insurers renegotiated contracts because of recent skepticism expressed by some physician groups about the effectiveness of the company’s prenatal monitoring system, he said.

“We were adversely affected by those guys sitting on the fence, asking whether this is an advantageous thing, despite the studies that support our services,” Gavin said.

Tokos makes a device that can detect the onset of early labor and also provides nurses to monitor the device.

Krishen Sud, an analyst with the brokerage Needham & Co. in New York, said: “The company had very good quarters up through September, but the last quarter was not good at all. Most people had a sense that the company’s business had slowed down but were surprised by the $5.5-million charge for receivables.”