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Hospital stock turns critical
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February 23, 1999: 12:32 p.m. ET
New American Healthcare shares plummet on projected loss in 4Q
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NEW YORK (CNNfn) - New American Healthcare Corp. saw it stock plummet more than 56 percent Tuesday after the health-care services company sharply reduced its earnings projections for the fiscal fourth quarter and the year ending March 31, 1999, and for fiscal 2000.
Shares of New American Healthcare (NAH) were down 4-3/16 to 3-1/4 in recent trading.
The drop followed word from the Nashville, Tenn.-based company that it is cutting earnings expectations from 8 cents per share to a loss of about 10 cents for its fiscal fourth quarter, ending March 31. The company expects to give a more definitive estimate on fiscal year 2000 at the end of March.
New American said the earnings reduction for the fourth quarter stems from managed care pricing pressures in three markets, lower-than-expected volume growth, a slowdown in physician recruitment and a non-recurring charge connected to the former chief executive officer's severance agreement.
"I regret that one of my first official acts is to signal poor financial results," said Thomas W. Singleton, president and CEO. "I don't expect to convince anyone that this is not a serious event. However, I assure you that I would not undertake this challenge unless I was confident that we can fix the problems and restore credibility."
Singleton said the problems facing New American are common to the hospital industry. 
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