Mednax Shares Down 10% After 4Q Earnings Miss, Contract Cancellations
February 20 2020 - 9:19AM
Dow Jones News
By Chris Wack
Mednax Inc. shares were down 10% to $24 premarket after the
company had contracts cancelled by affiliates of UnitedHealth and
it reported earnings that missed analysts' expectations.
The company reported fourth-quarter earnings of $9.3 million, or
11 cents a share, compared with $60.2 million, or 68 cents a share,
in the same period a year ago. Analysts polled by FactSet were
looking for earnings of $41.3 million, or 59 cents a share.
Revenue for the quarter was $905.4 million, compared with last
year's $888.4 million and the $901.2 million analysts were
expecting.
Mednax also said it has received notification by entities
affiliated with UnitedHealth Group that contracts of the company's
affiliated practices across four states, covering all of the
services that Mednax-affiliated physicians provide in those states,
have been unilaterally terminated, with effective dates ranging
from March 1 to Sept. 1, 2020.
Mednax said the total annual historical revenue under these
contracts represents about 2% of its consolidated annual 2019
revenue of $3.5 billion.
Mednax said that given the unprecedented nature of these
actions, it can't estimate the impact of these surprise
terminations, which eliminate from United's networks
Mednax-affiliated physicians providing anesthesia coverage,
neonatology and high-risk obstetrics in urban and rural areas.
Write to Chris Wack at chris.wack@wsj.com
(END) Dow Jones Newswires
February 20, 2020 09:04 ET (14:04 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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