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Sept. 8, 2017, 6:53 a.m. EDT

How Hurricanes Harvey and Irma are affecting health care companies

Hospital chains, medical technology facilities and pharmacies are located in the affected areas

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By Emma Court


Reuters
Waves crash against the seawall as Hurricane Irma slammed across islands in the northern Caribbean on Wednesday.

With Hurricane Irma and Hurricane Harvey hitting the U.S., the devastating storms are expected to and have affected health care companies with business in those parts of the country, from hospital chains to medical technology facilities and parts of the pharmaceutical supply chain.

Hospital chains are chief among them, since hurricane activity can and has damaged hospital property, required patient relocation and disrupted care.

With Hurricane Irma headed toward the Florida coast, the five hospital companies that appear to have the most Florida exposure are Tenet Healthcare Corporation /zigman2/quotes/207964487/composite THC +2.20% , Surgery Partners Inc. /zigman2/quotes/208307762/composite SGRY +5.28% , HCA Holdings Inc. /zigman2/quotes/205934574/composite HCA +1.27% , Envision Healthcare  and Community Health Systems /zigman2/quotes/203657360/composite CYH +9.60% , according to Raymond James analyst John Ransom.

Take Hurricane Matthew last October, which hit the Florida coast and eventually developed into a Category 5 hurricane; by contrast, Hurricane Irma is a Category 5 storm already.

Hurricane Matthew affected companies in different ways. It cost Tenet hospitals an estimated $5 to $10 million and Tenet surgery centers an estimated $1.5 to $2 million, and cost Surgery Partners about $1.5 to $2 million, Ransom noted.

Read: Harvey likely to have modest impact on HCA results: Mizuho

Community Health Systems said that Hurricane Matthew had a negative impact but didn’t specifically quantify it. HCA said the 2016 hurricane caused “minor disruption” but no major issues.

For a company like MEDNAX Inc. /zigman2/quotes/204002255/composite MD +3.38% , which provides physician services and for which Florida is one of its largest states, “the bigger impact will likely come from office-based practices, which are more exposed to closures and/or rescheduling,” Ransom said.

Related: U.S. stocks turn lower as investors wrestle with ECB, Hurricane Irma

A number of medical technology companies also have facilities in areas hit by or expected to be hit by Hurricane Irma, including C.R. Bard , Boston Scientific Corp. /zigman2/quotes/203726728/composite BSX +0.59% , Cantel Medical Corp. /zigman2/quotes/208355023/composite CMD +1.21%  , CONMED Corp. /zigman2/quotes/208421017/composite CNMD -0.75% , Hill-Rom Holdings Inc. /zigman2/quotes/200618216/composite HRC +2.20% , LivaNova /zigman2/quotes/208121019/composite LIVN +1.78% , Medtronic /zigman2/quotes/206816578/composite MDT +0.05% , Stryker Corp. /zigman2/quotes/207664662/composite SYK -0.02% and Zimmer Biomet /zigman2/quotes/205473073/composite ZBH -2.11% , according to Needham analyst Mike Matson.

“We estimate that the two storms (Harvey and Irma) could result in a procedural growth drag of ~30 bps for each week that hospitals are out of commission and/or patients are displaced,” Matson said. “We believe this impact could last anywhere from 2-4 weeks, resulting in an estimated 60-120 bps drag on U.S. procedure growth in 3Q17.”

See more: Death toll rises to 10 as Hurricane Irma barrels through Caribbean, heads for Florida

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Hurricane Irma Devastates Caribbean Islands

Hurricane Irma, the most powerful storm on record to hit the Atlantic Ocean, battered several islands in the northeast Caribbean on Wednesday as it barreled toward Puerto Rico and Florida. Photo: AFP

Pharmacies were also likely affected by Hurricane Harvey, noted UBS analyst Michael Cherny.

CVS Health Corp. /zigman2/quotes/209664499/composite CVS +0.36%  has about 815 retail stores in Texas and 134 in Louisiana, and Walgreens Boots Alliance /zigman2/quotes/203410933/composite WBA +2.81%  has about 713 retail stores in Texas and 158 in Louisiana, he said.

“The stores located in the parts of TX and LA that were hit hardest by the storm could see material damage or even total collapse that will take time and effort to fully repair,” he said. “Besides the time to repair or rebuild stores, the communities hit by the storm will themselves take time to rebuild. Together, these factors will determine if/when these stores return to pre-storm traffic levels.”

The major stock indexes swung between gains and losses Thursday, in part because of hurricane fears. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.78%  was down 0.2% and the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.59%  was down 0.1%.

/zigman2/quotes/207964487/composite
US : U.S.: NYSE
$ 18.61
+0.40 +2.20%
Volume: 1.69M
July 6, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.91 billion
Rev. per Employee
$158,554
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/zigman2/quotes/208307762/composite
US : U.S.: Nasdaq
$ 11.77
+0.59 +5.28%
Volume: 707,459
July 6, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$564.80 million
Rev. per Employee
$161,041
loading...
/zigman2/quotes/205934574/composite
US : U.S.: NYSE
$ 99.21
+1.24 +1.27%
Volume: 1.36M
July 6, 2020 4:00p
P/E Ratio
11.29
Dividend Yield
0.00%
Market Cap
$33.08 billion
Rev. per Employee
$178,156
loading...
/zigman2/quotes/203657360/composite
US : U.S.: NYSE
$ 3.31
+0.29 +9.60%
Volume: 2.73M
July 6, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$361.39 million
Rev. per Employee
$162,701
loading...
/zigman2/quotes/204002255/composite
US : U.S.: NYSE
$ 18.05
+0.59 +3.38%
Volume: 719,481
July 6, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.49 billion
Rev. per Employee
$226,741
loading...
/zigman2/quotes/203726728/composite
US : U.S.: NYSE
$ 35.59
+0.21 +0.59%
Volume: 6.48M
July 6, 2020 4:00p
P/E Ratio
11.73
Dividend Yield
N/A
Market Cap
$50.55 billion
Rev. per Employee
$306,969
loading...
/zigman2/quotes/208355023/composite
US : U.S.: NYSE
$ 45.07
+0.54 +1.21%
Volume: 681,801
July 6, 2020 4:00p
P/E Ratio
67.39
Dividend Yield
0.00%
Market Cap
$1.88 billion
Rev. per Employee
$332,807
loading...
/zigman2/quotes/208421017/composite
US : U.S.: NYSE
$ 72.46
-0.55 -0.75%
Volume: 216,571
July 6, 2020 4:00p
P/E Ratio
64.86
Dividend Yield
1.10%
Market Cap
$2.08 billion
Rev. per Employee
$277,007
loading...
/zigman2/quotes/200618216/composite
US : U.S.: NYSE
$ 114.02
+2.45 +2.20%
Volume: 918,243
July 6, 2020 4:00p
P/E Ratio
52.18
Dividend Yield
0.77%
Market Cap
$7.43 billion
Rev. per Employee
$286,180
loading...
/zigman2/quotes/208121019/composite
US : U.S.: Nasdaq
$ 51.91
+0.91 +1.78%
Volume: 503,900
July 6, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.48 billion
Rev. per Employee
$276,740
loading...
/zigman2/quotes/206816578/composite
US : U.S.: NYSE
$ 93.21
+0.05 +0.05%
Volume: 4.37M
July 6, 2020 4:00p
P/E Ratio
26.30
Dividend Yield
2.49%
Market Cap
$124.96 billion
Rev. per Employee
$353,777
loading...
/zigman2/quotes/207664662/composite
US : U.S.: NYSE
$ 183.90
-0.04 -0.02%
Volume: 1.07M
July 6, 2020 4:03p
P/E Ratio
32.29
Dividend Yield
1.25%
Market Cap
$68.95 billion
Rev. per Employee
$377,806
loading...
/zigman2/quotes/205473073/composite
US : U.S.: NYSE
$ 118.07
-2.54 -2.11%
Volume: 1.52M
July 6, 2020 4:03p
P/E Ratio
65.17
Dividend Yield
0.81%
Market Cap
$24.94 billion
Rev. per Employee
$417,521
loading...
/zigman2/quotes/209664499/composite
US : U.S.: NYSE
$ 64.93
+0.23 +0.36%
Volume: 5.31M
July 6, 2020 4:00p
P/E Ratio
11.75
Dividend Yield
3.08%
Market Cap
$84.57 billion
Rev. per Employee
$659,586
loading...
/zigman2/quotes/203410933/composite
US : U.S.: Nasdaq
$ 43.16
+1.18 +2.81%
Volume: 8.24M
July 6, 2020 4:00p
P/E Ratio
11.09
Dividend Yield
4.24%
Market Cap
$36.83 billion
Rev. per Employee
$380,198
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
26,287.03
+459.67 +1.78%
Volume: 342.26M
July 6, 2020 5:22p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,179.72
+49.71 +1.59%
Volume: 2.38B
July 6, 2020 5:22p
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Emma Court covers healthcare for MarketWatch from New York. You can follow her on Twitter @EmmaRCourt.

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