For Immediate Release
Chicago, IL – April 1, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Allegheny Technologies Inc. (ATI), AK Steel (AKS), Boeing Co. (BA), MetLife Inc. (MET) and Navistar International Corp. (NAV).
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Here are highlights from Wednesday’s Analyst Blog:
Heathcare Reform Hikes Med Costs
Earlier this month, the US government had signed the Patient Protection and Affordable Care Act into law. Under this law, the government is liable to imply taxes on subsidies on retiree drugs with effect from 2011. The retiree drug subsidy is one of the several options available under Medicare that enables employers and unions to help their Medicare-eligible retirees obtain prescription coverage. Private employers that sponsor health plans, governments, churches and union health funds are eligible to receive the retiree drug subsidy.
Consequently, Allegheny Technologies Inc. (ATI), one of the leading specialty metals processor, announced recently that it is likely to report a $5 million non-cash charge in the first quarter of 2010 related to the health care reform. Steel company AK Steel (AKS) expects to record a charge of about $31 million in the first quarter of 2010 resulting from the recently enacted Patient Protection & Affordable Care Act, which resulted in a change in tax treatment of the company’s Medicare Part D reimbursements.
Companies including aerospace giant Boeing Co. (BA), insurer MetLife Inc. (MET) and truck-maker Navistar International Corp. (NAV) are likely to post similar cost increases. These companies along with Caterpillar and Deere had written to the Congress in December last year that imposition of tax on drug subsidy could reduce coverage and more retirees would shift to Medicare Part D.
Apparently, such charges would pressure profitability in the first quarter of 2010. Companies like Deere and Caterpillar have reported that such cost hikes annul their previously announced earnings guidance for the upcoming quarter.
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