Vegas insurer’s stock tumbles

Wednesday, Oct. 23, 2002 | 11:11 a.m.

Sierra Health Services Inc. of Las Vegas downplayed concerns today over an analyst report that warned investors Sierra is in danger of losing a lucrative contract to treat medical personnel and their dependents.

Shares of Sierra Health, the largest health insurer in Nevada, tumbled $3.87 to $16.30 Tuesday and were down another $1.17 this morning. The company reported strong earnings Monday.

"We are astounded that the market reacted so negatively to our earnings report yesterday. This was a solid good quarter for us. We beat the earnings estimate. Our balance sheet is stronger than ever and our market growth in Las Vegas continues to soar," said Peter O'Neill, Sierra Health's spokesman.

"We insure the military on the East Coast region from Maine to Virginia. Our contract with the military's TRICARE health plan was recently renewed for four more years," he said. "But in August, the military announced they are substantially changing the regional structure, meaning, our region will become much larger after the changes."

"What the analyst failed to mention was the upside potential in the changes, which could significantly increase our revenues for that portion of our business because we will have a much larger region to provide services to the military," he said.