Unicare’s Optimism Boosts Stock Value
IRVINE — Spurred by the company’s prediction Thursday that its first-quarter income will be almost triple last year’s and that income for all of 1993 could be twice what stock analysts have estimated, speculators boosted the price of Unicare Financial Corp.’s common stock by 23%.
The stock gained $3.125 a share to a new closing high of $16.50 in trading on the New York Stock Exchange. Despite the big price rise, trading remained fairly light, with just 19,800 shares changing hands.
Sparking the run-up was a statement by Russell E. Leatherby, chairman and chief executive of the workers’ compensation insurance company. Unicare, based in Irvine, expects to report a first-quarter profit of $2.4 million to $2.5 million, he said, and earnings as high as $2 a share, or more than $9 million, for the full year. The company reported a profit of $3.5 million, or 70 cents a share for 1992.
Leatherby said improvements in California’s workers’ compensation system, as well as a stabilizing unemployment rate, have reduced claims and will allow Unicare and other insurers to pass increased revenue through to the profit column.
“Now they’ve caught up with their reserve requirements, and the good results are flowing through,†said V.J. Dowling Jr., an insurance industry analyst with Paulsen, Dowling securities.
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