Shares of hospital operator Health Management Associates Inc. (HMA) fell Tuesday morning after the company lowered its fiscal year 2008 revenue outlook.
The stock dropped about 13%, declining 87 cents to $5.64 a share by 10:10 am Eastern Time. Shares of the Naples, Florida-based company broke through support and are at their lowest level since mid-July.
After the closing bell on Monday, Health Management Associates reported an increase in its profit for the second quarter even as earnings per share remained flat with the same period last year. Net income for the latest quarter included refinancing costs and gains from the sale of assets. Revenue for the quarter increased almost 4%. For fiscal year 2008, the company tightened its earnings outlook and lowered its forecast for revenue.
Health Management lowered its forecast for full-year revenue to a range of $4.4 billion-$4.6 billion from the prior range of $4.5 billion-$4.7 billion. Wall Street analysts expect revenue of $4.55 billion for the year.
The company projects admissions decrease for the full year between 1% and 3%.
The firm's net income for the second quarter was $12.40 million, or $0.05 per share, compared to net income of $11.91 million, or $0.05 per share, in the prior-year quarter.
The company's income from continuing operations for the quarter surged to $21.92 million, or $0.09 per share, from $16.00 million, or $0.07 per share, in the year-earlier quarter.
Excluding refinancing costs and gains from the sale of assets, earnings per share from continuing operations for the latest quarter was $24.84 million, or $0.10 per share. On average, nineteen analysts polled by First Call/Thomson Financial expected the company to earn $0.11 per share for the quarter
Net revenue for the quarter increased 3.9% to $1.11 billion from $1.06 billion in the previous-year quarter. Wall Street analysts had a consensus revenue estimate of $1.13 billion.
Health Management said that same hospital net revenue stood at $1.11 billion, higher than $1.06 billion in the year-ago quarter.
Income from operations climbed to $103.65 million from $85.38 million in the same period last year.
Gains on sales of assets in the quarter were $6.18 million compared to gains of $2.59 million in the year-ago quarter. Refinancing and debt modification costs for the latest quarter were $10.83 million.
Loss from discontinued operations for the quarter widened to $9.53 million, or $0.04 per share per share, from $4.09 million, or $0.02 per share a year ago.
In the quarter, total patient days declined to 317,431 from 323,639 in the prior-year period, while total number of surgeries slipped to 69,649 from 70,187 in the previous-year quarter. Outpatient revenue percentage improved to 48.8% from 48.0%, while inpatient revenue percentage declined to 51.2% from 52.0% in the previous year.
For the six months, the company's net income rose to $146.27 million, or $0.60 per share, from $76.95 million, or $0.31 per share, a year ago.
Income from continuing operations for the half-year period climbed to $183.53 million from $83.62 million in the previous-year period. Adjusted income from continuing operations for the period was $61.89 million, or $0.25 per share.
Net revenue for the half year increased to $2.26 billion from $2.17 billion in the prior-year period.
For fiscal year 2008, the company also said it expects earnings from continuing operations in a range of $0.41-$0.47 per share compared to its earlier forecast for earnings in a range of $0.40-0.50 per share. Analysts expect earnings of $0.47 per share for the year.
The outlook excludes the previously reported gain from the Novant Health joint venture transaction and other items.
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