In the Region Worker compensation insurance rates being...

BUSINESS DIGEST

October 31, 2001

In the Region

Worker compensation insurance rates being raised 8.4%

The Maryland Injured Workers Insurance Fund's board voted yesterday to boost the rates charged to some 20,000 Maryland businesses by 8.4 percent or an estimated $12 million per year. IWIF, which provides workers compensation insurance coverage to more than one of five businesses in the state, will start the new rate schedule Jan. 1.

Preston Williams, IWIF's chief executive officer, said the new rates were approved after a presentation to the board by an actuarial consultant. The agency expects to collect about $140 million in premiums this year. The increase will boost the average IWIF policyholder's $5,395 premium by $453 a year.

The consultant's report said IWIF expenses are expected to jump substantially because of increased costs of reinsurance policies since the Sept. 11 terrorist attacks.

USinternetworking Inc. pares loss; revenue up

USinternetworking Inc., the Annapolis software company, reported yesterday that its losses narrowed and revenue increased in the quarter that ended Sept. 30.

The company's net loss was $37.6 million, or 27 cents per share, compared with a net loss of $47.8 million, 49 cents per share, in the third quarter of last year. Revenue was $31.7 million, compared with $28.3 million a year earlier, and earnings before interest, taxes, depreciation and amortization were $680,000.

USinternetworking took a $2.6 million restructuring charge during the third quarter for a reorganization in which it laid off workers. It said that action helped its bottom line.

Profit rises to 32 cents a share at Coventry Health Care

Coventry Health Care Inc. yesterday posted earnings of $21.7 million, or 32 cents a diluted share for the quarter that ended Sept. 30, beating consensus analysts' estimates by a penny. That compares with $15.4 million, or 23 cents a share, earned in the third quarter of 2000.

Revenue was $794.7 million, up 22.7 percent from $647.6 million in the 2000 quarter. That reflected both an increase in premiums - up 17 percent for contracts renewed during the quarter - and membership growth. Helped by several acquisitions, membership grew 19.4 percent in the year, to 1.85 million.

The health insurer, which has its headquarters in Bethesda, operates HMOs in about a dozen markets. Although its headquarters are here, it does not have a health plan in Maryland.

Gilden Integrated adds 4 new accounts

Gilden Integrated, a marketing communications agency which focuses on the technology sector, has added four accounts to its client roster, but did not disclose their value.

MicroStrategy, a McLean, Va. provider of business intelligence software, hired Baltimore-based Gilden to handle its public relations. Quest Systems Inc., a professional computer and information technology recruiting firm in Bethesda, has hired the agency to do strategic planning, branding, and graphic and multimedia design.

Gilden also will market the launch of BrightFly, a Baltimore-based provider of information-technology risk-management services. Founders Financial LLC, an organization of independent financial services professionals in Timonium, has asked Gilden to develop its branding program.

Cornerstone lands 3 new ad accounts

Cornerstone announced yesterday that it landed three new advertising accounts estimated to be worth more than $2 million in annual billings.

The Baltimore-based marketing and communications agency now will handle recruitment advertising and employer branding initiatives for Johns Hopkins Medicine, The Rouse Co. and W.L. Gore & Associates.

Cornerstone said it plans to expand its office space at 519 W. Pratt St. by 40 percent. The new business and office expansion are being accompanied by a redesigned logo and the launch of a new tagline: "Marketing that Multiplies."

Elsewhere

CVS posts 16% drop in earnings, will close 200 pharmacies

CVS Corp. said yesterday that it will close 200 of its pharmacies in January as it reported a 16 percent decline in third-quarter earnings and warned that its fourth-quarter profit will be well below expectations.

CVS reported earnings of $124 million, or 30 cents per diluted share, for the three months that ended Sept. 29, down from $147 million, or 36 cents per share, in last year's third quarter. It warned that earnings before items in the fourth quarter will be in the range of 23 cents to 28 cents per share - about half of the 49 cents analysts had expected for the period that ends Dec. 29.

The nation's largest drugstore chain operator, which has more than 4,100 stores in 32 states and the District of Columbia, also said it will close one of its 10 distribution plants and one of two ProCare mail-order facilities. Despite the closings, CVS will remain America's largest drugstore chain.

Coke to acquire Odwalla, maker of premium juices

The Coca-Cola Co., extending its reach into the growing market for noncarbonated drinks, said yesterday that it is buying the premium juice maker Odwalla Inc. for $181 million.

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