DaVita HealthCare Partners Inc. ( DVA ) reported
fourth-quarter 2012 operating earnings of $1.68 per share, beating
the Zacks Consensus Estimate of $1.57 as well as $1.56 per share
reported in the prior-year quarter. Operating income amounted to
$173.3 million, increasing from $148.1 million in the year-ago
Including $17.5 million or 17 cents per share related to
transaction expenses associated with the acquisition of HealthCare
Partners (HCP), debt refinancing charges and expenses associated
with a legal settlement, net income attributable to DaVita's
shareholders amounted to $155.8 million or $1.51 per share,
compared with $148.1 million or $1.56 per share in the year-ago
Net operating revenue in the reported quarter increased 38% year
over year to $2.48 billion from $1.79 billion. Top line surpassed
the Zacks Consensus Estimate of $2.34 billion.
Total operating expenses and charges climbed 43% to $2.09
billion from $1.46 billion in the fourth quarter of 2011.
DaVita provided administrative services across 1,954 outpatient
dialysis centers in the U.S., serving approximately 153,000
patients during the reported quarter. Additionally, the company
provided administrative services in 36 outpatient dialysis centers
in 8 non-U.S. countries, serving approximately 2,200 patients.
During the reported quarter, DaVita acquired 22 centers and
opened 22 centers in the U.S., while 10 centers were acquired and 2
were opened outside the U.S.
Total U.S. treatments for the reported quarter came in at
approximately 5.74 million or 72,161 treatments per day. This
represents a per day increase of 9.1% over the year-ago quarter.
Growth of non-acquired treatment in the quarter stood at 4.7%.
The company's effective tax rate was 34.7% in the reported
quarter. The third-party owners' income attributable to non-tax
paying entities impacted the effective tax rate. The effective tax
rate attributable to DaVita in the reported quarter was 38.5%.
Segment wise, total revenue from the Dialysis and
Related Lab Services segment came in at $1.83 billion
during the quarter, against $1.67 billion in the prior-year
Operating income for the segment expanded 2% year over year to
$362 million in the reported quarter from $356 million in the
HealthCare Partners generated revenues
of $477 million and operating income of $67 million in the reported
Ancillary Services and Strategic
Initiatives generated revenues of $178 million, up
from $132 million in the year-ago quarter. However, the segment
recorded an operating loss of $15 million in the reported quarter,
wider than $14 million loss incurred in the year-ago quarter.
Full-Year 2012 Highlights
For 2012, DaVita reported operating income per share of $6.25,
which surpassed the Zacks Consensus Estimate of $6.10 and
prior-year earnings of $5.11. Operating income amounted to $612.4
million, compared with $492.4 million in 2011.
Including $76.4 million or 78 cents per share related to
transaction expenses associated with the acquisition of HCP, debt
refinancing charges and expenses associated with a legal
settlement, net income came in at $536.0 million or $5.47 per share
against $478.0 million or $4.96 per share in 2011.
Net income for 2011 includes an after-tax non-cash goodwill
impairment charge of $14.4 million or 15 cents per share. Net
operating revenue was $8.19 billion, increasing from $6.73 billion
in 2011, while total operating expenses and charges increased to
$6.89 billion from $5.58 billion.
Operating cash flow amounted to $200 million during the quarter
under review. For 2012, operating cash flow amounted to $1.10
billion, reflecting a 7% decrease from $1.18 billion in 2011. Free
cash flow in the reported quarter was $83 million and full year
free cash flow amounted to $715 million.
Total assets at the end of 2012 were $16.04 billion, up from
$8.90 billion as of Dec 31, 2011. Long-term debt increased to $8.33
billion from $4.42 billion as of Dec 31, 2011. Shareholders' equity
as of Dec 31, 2012 amounted to $3.93 billion, up from $2.27 billion
at 2011 end.
Operating income for 2013 is expected around $1.75-$1.90
billion, including the operating income from HCP. Additionally,
DaVita announced its operating income guidance for the dialysis
services and related ancillary businesses for 2013 of $1.35-$1.45
Operating income from HCP is expected to be $400-$450 million in
2013. The company expects the effective tax rate attributable to
DaVita in the range of 39.5%-40.5% for 2013. Operating cash flow
guidance for 2013 stands at $1.35-$1.50 billion.
DaVita currently carries a Zacks Rank #3 (Hold). Another
healthcare company Gentiva Health Services Inc. (
GTIV ) reported
fourth-quarter 2012 operating earnings of 31 cents per share, which
lagged the Zacks Consensus Estimate of 35 cents as well as the
year-ago quarter level of 37 cents per share.
Operating income of $9.7 million also declined from $11.3
million in the year-ago quarter. Other healthcare companies worth
considering are LHC Group, Inc. ( LHCG ) and
RadNet, Inc. ( RDNT ), which carry a
Zacks Rank #2 (Buy).DAVITA INC (DVA): Free Stock Analysis ReportGENTIVA HEALTH (GTIV): Free Stock Analysis
ReportLHC GROUP LLC (LHCG): Free Stock Analysis
ReportRADNET INC (RDNT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment