NEW YORK (AP) -- HMS Holdings Corp.'s shares shed nearly a quarter of their value Friday after the medical information company said its third-quarter earnings dropped 27 percent on higher costs.
The New York company earned $10.5 million, or 12 cents per share, in the three months that ended Sept. 30. That compares with net income of $14.4 million, or 17 cents per share, in last year's quarter. Adjusted earnings were 20 cents per share, not counting items like stock-based compensation expenses.
Revenue rose 23 percent to $113.2 million.
Analysts surveyed by FactSet expected, on average, earnings of 15 cents per share on $123.2 million in revenue.
The company's shares fell more than 23 percent, or $6.34, Friday morning to $20.58. That marked the stock's biggest one-day plunge in more than four years.
HMS, which coordinates benefits and performs billing audits for state-run and commercial health programs, said total cost of services climbed 36 percent in the quarter to $78.3 million, as compensation, direct project costs and data processing expenses all rose.
Selling, general and administrative expenses also climbed 34 percent to $14.2 million.
HMS also said it expects 2013 adjusted earnings to range between 95 cents and $1.02 per share on revenue of $570 million to $600 million.
Company shares have now dropped more than 30 percent so far this year. They also plunged earlier this month when HMS lowered its 2012 earnings and revenue guidance due to ongoing issues with its Medicaid program.
The company said Oct. 4 that it now expects to earn 55 to 60 cents per share in 2012, down from its prior forecast of 58 to 64 cents per share. It also dropped its annual revenue forecast to $480 million to $490 million, from a prior range of $500 million to $515 million.
Analysts had expected, on average, earnings of 58 cents per share on revenue of $493.5 million for the year.
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