HMA Previews 1Q Earnings Results - Analyst Blog
April 10 2013 - 10:10AM
Zacks
Health Management
Associates (HMA), a leading operator of general acute care
hospitals, recently previewed earnings results for the first
quarter of 2013.
Health Management expects net
revenues of about $1.48 billion from continuing operations for the
first quarter. The company expects adjusted EBITDA in the
range of $192 million to $196 million. Earnings per share from
continuing operations (attributable to the company and excluding
costs associated with debt) are expected to be 8 cents or 9 cents.
Upon exclusion of about 4 cents of expense for interest rate swap,
diluted earnings per share should be 12 cents or 13 cents.
Adjusted admissions are expected to
drop about 5.7% in the first quarter and admissions should be down
8.8% (both for continuing same hospital operations). Provision for
doubtful debts for the reported quarter should be between 14% and
14.2%, higher than 11.9% in the prior-year quarter.
For 2013, the company guided to net
revenues (before bad debts) of $6.8 billion to $7.0 billion and
same hospital adjusted admissions growth in the range of (3%) to
0.0%. The company expects adjusted EBITDA of $978 million to $1,010
million for 2013 and provision for doubtful debts, as a proportion
of revenues, is pegged in the range of 14% to 15%. Earnings from
continuing operations (attributable to Health Management) are
expected to be between 86 cents and 95 cents.
Health Management is engaged in the
ownership and operation of general acute care hospitals in
non-urban communities across the U.S. The company is an active
acquirer of underperforming hospitals with a turnaround potential
in high-growth markets. The company runs 71 hospitals with about
11,000 beds in rural and semi-urban areas across the country.
Health Management’s competitors in niche markets include
Community Health Systems (CYH).
Health Management should benefit
from a gradual growth in admissions largely due to improvements in
Emergency Room, sustained physician recruitment and service
development. Moreover, it is well placed to expand margins from
continuing operations and drive above-industry average earnings
growth. However, the debt burden for the company remains
sizeable.
The stock carries a Zacks Rank #3
(Hold). Given Imaging Ltd. (GIVN) and
Cyberonics Inc. (CYBX) are Zacks Rank #1 (Strong
Buy) stocks, which are expected to do well.
CYBERONICS INC (CYBX): Free Stock Analysis Report
COMMNTY HLTH SY (CYH): Free Stock Analysis Report
GIVEN IMAGING (GIVN): Free Stock Analysis Report
HEALTH MGT ASSC (HMA): Free Stock Analysis Report
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