Mednax Shares Down on Cancelled Contracts, 4Q Earnings Miss
February 20 2020 - 10:38AM
Dow Jones News
By Chris Wack
Mednax Inc. shares were down 17% to $22.27 after the company had
contracts cancelled by affiliates of UnitedHealth Group Inc. and it
reported earnings that missed analysts' expectations.
The company said fourth-quarter net income was $9.33 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 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 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 10:23 ET (15:23 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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