DaVita Faces New Investigations - Analyst Blog
October 07 2011 - 2:13PM
Zacks
Two law firms started investigations against DaVita
Inc. (DVA) earlier this week regarding the alleged
over-billing of Medicare by the company.
DaVita is already facing two federal investigations for
over-billing of Medicare and over-use of Epogen, a medicine used
for increasing the red blood cells in kidney patients.
Additionally, as per the Denver Post, the company is also being
investigated for forging inappropriate alliances with
pharmaceutical companies and physicians.
Now, Bronstein, Gewirtz & Grossman LLC has started an
investigation to determine whether DaVita has violated any federal
securities laws, while Brodsky & Smith LLC is investigating the
impact of the federal investigations on the company.
If the charges of over-billing Medicare are found to be true,
DaVita might be heavily fined. Under the False Claims Act, the
company might have to pay three times the losses caused to the
government due to the over-billing, along with civil penalties.
Earnings Review
DaVita reported second-quarter net operating income of $114.4
million, or $1.17 per share, which exceeded the Zacks Consensus
Estimate by 3 cents. The earnings were also higher than $110.4
million or $1.06 per share earned in the comparable quarter of
2010.
Further, the Zacks Consensus Estimate for DaVita’s third-quarter
earnings is currently at $1.29 per share, up about 12.36%
year-over-year. Of the 14 firms covering the stock, 1 firm revised
its estimate downward, while no upward revisions were witnessed in
the last 30 days.
For 2011, earnings are expected to be about $4.81 per share,
climbing about 9.92% year-over-year. The company competes with
Lincare Holdings Inc. (LNCR) and
HealthSouth Corporation (HLS).
Currently, DaVita caries a Zacks #2 Rank, implying a short term
Buy rating.
On Thursday, the shares of the company closed at $64.47, up
2.89%, on the New York Stock Exchange.
DAVITA INC (DVA): Free Stock Analysis Report
HEALTHSOUTH CP (HLS): Free Stock Analysis Report
LINCARE HLDGS (LNCR): Free Stock Analysis Report
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