Gentiva Provides Weak 2012 Forecast - Analyst Blog
January 11 2012 - 6:45AM
Zacks
On Tuesday, Gentiva Health Services Inc. (GTIV)
released its financial outlook for 2012. The company expects to
generate net revenues of $1.70–1.76 billion in 2012, substantially
lower than the 2011 guidance of $1.78–1.82 billion.
The Zacks Consensus Estimate for Gentiva’s 2012 revenue lies
above the company’s guidance range at $1.79 billion.
Additionally, Gentiva expects the adjusted earnings before
interest, taxes, depreciation and amortization attributable to
continuing operations (Adjusted EBITDA) to be between $170 million
and $190 million in 2012. The adjusted EBITDA guidance excludes
expenses related to acquisitions, restructuring, integration
activities, legal settlements, dividend income and impairment of
goodwill, intangible asset and other long-lived asset.
However, Gentiva will disclose the 2012 outlook for its other
financial parameters (including adjusted income from continuing
operations attributable to Gentiva shareholders) subsequent to the
amendment of its senior secured credit agreement. Meanwhile, the
Zacks Consensus Estimate for 2012 earnings per share currently
stands at 92 cents, down 44.3% from the previous year.
The company had announced the amendment to the credit agreement
in November 2011 as the initial part of a two-pronged strategy to
increase the flexibility of its financial covenants over the next
few years.
Among other things, the amendment consists of alteration of the
definition of consolidated EBITDA, whereby all expenses related to
Gentiva’s cost realignment and the operating losses of all the
branches that were closed or sold in the last quarter of 2011, will
be added back during the calculation of consolidated EBITDA. Thus,
in order to aid the dialogue related to the amendment with its
bank, Gentiva revealed the net revenue and adjusted EBITDA guidance
earlier than others.
On Monday, Tenet Healthcare Corp. (THC), a
health care services company, which owns and operates general
hospitals and related health care facilities, also announced its
adjusted EBITDA projection of $1.2–1.3 billion in 2012.
Gentiva has not declared its 2011 earnings result as yet. The
Zacks Consensus Estimate for the company’s earnings in 2011 is
currently $1.65 per share, sinking 41.5% from 2010. The estimated
number lies within the company’s guidance range of $1.50–1.70
billion.
Gentiva currently carries a Zacks #3 Rank, implying a short-term
‘Hold’ rating.
GENTIVA HEALTH (GTIV): Free Stock Analysis Report
TENET HEALTH (THC): Free Stock Analysis Report
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