Disappointing 4Q for Gentiva - Analyst Blog


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.

Operating income for the reported quarter includes a loss of 1 cent due to the impact of Hurricane Sandy. Including all one-time charges and results from discontinued operations, Gentiva posted net income of $8.6 million or 28 cents per share, increasing from $4.6 million or 15 cents per share in the fourth quarter of 2011.

Gentiva's net revenues declined 5% year over year to $425.0 million from $449.2 million in the year-ago quarter. Net revenue also missed the Zacks Consensus Estimate of $433.0 million. The year-over-year decline was largely due to a significant cut in the home health Medicare rates along with the sale and closure of some branches.

The Home Health Episodic segment revenue declined 3% year over year to $209.8 million. Additionally, the Hospice segment revenue declined 6% year over year to $187.3 million.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) attributable to continuing operations decreased 6.2% to $44.2 million from $47.1 million in the prior-year quarter.

Full-Year 2012 Highlights

For full year 2012, Gentiva reported operating income of $37.7 million or $1.23 per share, substantially lower than $49.2 million or $1.60 per share in 2011. Earnings per share also lagged the Zacks Consensus Estimate of $1.29.

Earnings include credit agreement amendment fees of 3 cents and a negative impact of 1 cent due to Hurricane Sandy. Net income came in at $26.8 million or 87 cents per share against prior-year net loss of $450.5 million or $14.85 per share.

Net revenue was $1.71 billion, down 5% year over year from $1.80 billion in 2011. Net revenue missed the Zacks Consensus Estimate of $1.72 billion.

Financial Update

Gentiva exited 2012 with cash and cash equivalents of approximately $207.1 million, up from $164.9 million as of Dec 31, 2011. Long-term debt was $935.2 million, down from $973.2 million at 2011 end.

During the reported quarter, net cash from operating activities amounted to $51.3 million versus cash outflow of $9.2 million in the prior-year period. Free cash flow also improved considerably to $48.8 million from ($13.9) million in the fourth-quarter of 2011.

As of Dec 31, 2012, Gentiva had total assets of $1.51 billion and shareholders' equity of $234.7 million, as compared with $1.53 billion and $202.5 million, respectively, as of Dec 31, 2011.

Zacks Rank

Gentiva carries a Zacks Rank #2 (Buy). Another healthcare company UnitedHealth Group Inc. ( UNH ) reported fourth-quarter 2012 earnings of $1.20 per share, in line with the Zacks Consensus Estimate. Earnings, however, increased 2.6% on a year-over-year basis.

Other healthcare companies such as LHC Group, Inc. ( LHCG ) and RadNet, Inc. ( RDNT ), carrying a Zacks Rank #2 (Buy), are expected to release their fourth-quarter 2012 earnings results shortly.

GENTIVA HEALTH (GTIV): Free Stock Analysis Report

LHC GROUP LLC (LHCG): Free Stock Analysis Report

RADNET INC (RDNT): Free Stock Analysis Report

UNITEDHEALTH GP (UNH): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: GTIV , LHCG , RDNT , UNH



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