Business briefs for April 22, 2002

Monday, April 22, 2002 | 9:58 a.m.

Higher prices boost hospital giant

NASHVILLE, Tenn. -- HCA Inc., the biggest U.S. hospital chain and a key operator in Las Vegas, today said first-quarter profit rose 12 percent as the company raised prices for managed-care insurers and treated more patients.

Net income rose to $385 million, or 74 cents a share, from $343 million, or 62 cents, a year earlier, the company said. Revenue rose 8.3 percent to $4.87 billion from $4.50 billion.

Chief Executive Officer Jack Bovender has used HCA's market muscle in places such as Texas and Florida to boost prices 6 percent to 8 percent in contracts with managed-care insurers. The company also has invested in emergency rooms and profitable medical services such as cardiology to attract more patients.

"Probably the most remarkable element of the quarter was that the pricing remains very robust for them," said SunTrust Robinson Humphrey analyst Darren Lehrich, who has a "buy" rating on HCA and doesn't own the shares. "I think this is going to be a trend we're going to continue to see this year and, as contracts roll over, into 2003."

HCA was expected to earn 72 cents, the average estimate of analysts surveyed by Thomson Financial/First Call.

Shares of the Nashville, Tennessee-based company fell 41 cents to $47.60 in mid-morning trading today.

Revenue per inpatient admission rose 10.1 percent in the quarter for hospitals HCA owned at least a year, an indication that the company boosted prices for insurers.

Admissions rose less than 1 percent for hospitals owned in both quarters, though the company said it provided more outpatient care as emergency-room visits rose 4.4 percent.

HCA is also cutting costs by combining back-office functions such as billing and collection into about a dozen regional centers.

Cable group posts unexpected profit

ATLANTA -- Cox Communications Inc., the cable-television company that lost a bid in December to buy AT&T Corp.'s Broadband unit, today reported it had an unexpected first-quarter profit from gains on investments and a 19 percent increase in sales.

Net income fell to $135.6 million, or 22 cents a share, from $686.6 million, or $1.14, a year earlier. Sales rose to $1.18 billion, the Atlanta-based company said in a statement.

The fifth-largest U.S. cable operator had a pretax gain of $719.8 million to account for the change in value of shares used to back Cox securities. Cox, the main cable operator in Las Vegas, had sold shares of AT&T and other companies to raise money for system upgrades and reduce debt 14 percent to $6.93 billion in the quarter. Cox repeated its 2002 forecasts.

The company will spend $6.3 billion from 2000 through this year to upgrade cable systems to sell telephone, Internet and digital TV over a single connection, said Guzman & Co. analyst David Joyce, who recommends buying Cox shares and doesn't own them. Comcast Corp. in December agreed to buy AT&T's Broadband cable unit, with about 12 million customers.

The company forecast sales this year will rise 14 percent to 15 percent.

Shares of Cox today fell 89 cents to $36.12 in early trading. They had fallen 12 percent this year.

Classes target new business owners

Several local businesses will sponsor a series of educational seminars for new or prospective entrepreneurs interested in improving their businesses.

The four-part seminar will cover legal issues and topics such as certification, location, marketing and accounting practices. Local business leaders from BankWest of Nevada, the Nevada Minority Purchasing Council, Station Casinos Inc. and the law firm Quirk & Tratos are scheduled to provide instruction.

Classes will be held from 5:30 to 9 p.m. each Monday from April 29 through May 20 at the Dallas Events Center inside Texas Station.

General registration is $50 and $25 for members of the Nevada Minority Purchasing Council.

Those interested can call 362-4584.

Vegas health care giant reports growth

Universal Health Services Inc., parent company of Valley Health System in Las Vegas, today reported net income for the quarter ended March 31 of $45.7 million, a 26 percent increase from the $38.1 million reported in same quarter in 2001.

The King of Prussia, Pa.-based company reported earnings per share of 71 cents, up from 57 cents for the same quarter of 2001.

Revenue was $804.4 million, compared to $676.9 million in 2001. The company said patient admissions increased 5.6 percent in the company's acute care hospitals and 4.6 percent in its behavioral health hospitals.

Valley Health Systems operates Summerlin, Desert Springs and Valley hospitals and is building the $70 million, 176-bed Spring Valley Hospital at the corner of Rainbow Boulevard and Hacienda Avenue. Universal Health Services also has plans for a 180-bed hospital on Craig Road in North Las Vegas.

Auction chief sentenced for conspiracy

NEW YORK -- Former Sotheby's Holdings Inc. Chairman A. Alfred Taubman today was sentenced to one year in federal prison for conspiring with Christie's International Plc to fix commissions on art, antiques, and other valuables.

Defense lawyers had urged U.S. District Judge George Daniels to spare the 78-year-old Taubman a jail term and sentence him to probation, noting his poor health and philanthropy. Prosecutors asked for the maximum: three years in prison.

Daniels also ordered Taubman to pay a $7.5 million fine.

"This was a deceitful, secretive, criminal scheme whose object and purpose was illegal profits," Daniels said. "This was not a crime motivated by desperation or need, but by arrogance and greed."

The judge said Taubman showed no contrition for his crimes and portrayed himself as a victim of perjury and lies.

"He has neither acknowledged any personal responsibility, nor shown any remorse," Daniels said. "No one is above the law."

Taubman, the controlling shareholder in Sotheby's, was convicted of plotting with his counterpart at Christie's, Sir Anthony Tennant, to rig sellers' fees. Clients of the world's two leading auction houses paid $43 million in inflated commissions, the government said.