Franciscan Alliance blamed lower patient volumes, reimbursement reductions and Obamacare for its decision to eliminate 925 full-time positions through a mix of layoffs, reduced hours, retirements and attrition. The Mishawaka-based Catholic organization, which operates three hospitals in the Indianapolis area, said it is trying to cut expenses by as much as $500 million, or 20 percent, over the next few years. Most other hospitals around Indiana are doing the same. To reach that goal, Franciscan will also cut benefits for its remaining 19,000 employees. Of the 925 positions cut, 275 will come through layoffs. In the Indianapolis area, 83 employees were laid off and another 65 positions are being eliminated. In 2012, Franciscan’s 13 hospitals in Indiana and Illinois pulled in revenue of $2.5 billion, generating a net gain of $110 million, excluding a special accounting charge. However, the hospital chain’s operating profit margin decreased to 4.5 percent from 5.2 percent the previous year.
The National Institutes of Health awarded a $30 million grant to the Indiana Clinical and Translational Sciences Institute, a partnership of Indiana University, Purdue University and the University of Notre Dame. The money will help fund the institute at least through 2018. The Indiana University School of Medicine established the institute in 2008 with a $25 million NIH grant, plus about $25 million in matching grants from IU, Purdue, the state of Indiana and private partners such as Eli Lilly and Co. The institute estimates it supports more than 80 full-time-equivalent professional jobs across Indiana, who work on research in Alzheimer's disease, Parkinson's disease, autism, traumatic brain injury, polycystic kidney disease, and osteoporosis and osteoarthritis.
WellPoint Inc.’s stock fell nearly 5 percent in the second half of last week even though the health insurer reported better-than-expected third-quarter earnings. Investors backed away from health insurers as problems with the new Obamacare exchanges persisted. Indianapolis-based WellPoint earned $656.2 million in the quarter ended Sept. 30, down from $691.2 million in the same quarter a year ago. But because WellPoint has spent $1.2 billion buying back its own stock over the past year, the company’s profit per share actually increased to $2.16 in the latest quarter, from $2.15 a year ago. Excluding investment gains and one-time gains and charges, WellPoint would have earned $2.10 in the third quarter this year. On that basis, analysts were expecting profit of just $1.82 per share, according to a survey by Thomson Reuters. WellPoint raised its full-year profit forecast to $8.40 per share, an increase of 40 cents.
Profit at Eli Lilly and Co. fell 9 percent in the third quarter but still easily beat the expectations of Wall Street analysts. The Indianapolis-based drugmaker earned $1.2 billion in the three months ended Sept. 30, down from $1.3 billion in the same quarter last year. But results from last year were boosted by a payment from former Lilly partner Amylin Pharmaceuticals Inc. Excluding that payment and other special charges, Lilly’s profit-per-share soared 41 percent, to $1.11, up from 79 cents per share a year ago. Analysts had been expecting profit $1.04 per share, according to a survey by Thomson Reuters. This was the last full quarter in which Lilly will maintain its U.S. patents on Cymbalta, its bestselling drug. Sales of the antidepressant grew 11 percent in the quarter to nearly $1.4 billion.
Strong sales of new crop protection products helped Dow AgroSciences LLC cultivate revenue of $1.4 billion in its third quarter, up 8 percent from the same quarter a year ago. But profit for Dow AgroSciences tumbled more than 71 percent—from $63 million in the previous third quarter to $18 million in this year’s quarter. The figure represents earnings before accounting for interest, taxes, depreciation and amortization. Dow attributed the decrease in profit to higher seed returns in North America driven by a late, wet planting season, as well as increased spending on growth investments. Revenue from Dow’s crop protection products rose 10 percent in the quarter, driven by higher sales of herbicides in North America and insecticides in Latin America. Dow AgroSciences is an Indianapolis-based subsidiary of Michigan-based Dow Chemical Co.
Warsaw-based Zimmer Holdings Inc.’s third-quarter profit fell 13 percent to $154.4 million, or 90 cents a share, down from $178.1 million, or $1.02 a share, in the same quarter a year ago. Excluding special charges for restructuring and litigation, Zimmer would have earned $1.25 per share, a penny higher than analysts were expecting. Zimmer’s revenue in the quarter rose 4.8 percent to $1.07 billion. For the year, the company now expects per-share earnings of $5.70, which is near the low end of its previous profit forecast. Its sales continue to be dampened as high unemployment and an uncertain economy in the United States have caused patients to put off hip and knee replacement surgeries.