On Monday,
Gentiva Health Services Inc.
(
GTIV
) announced its projection of income from continuing operations
attributable to its shareholders of $1.00-1.20 per share for 2012.
The Zacks Consensus Estimate of $1.11 lies within the guided
range.
The earnings outlook shows a sharp decline from $1.68 per share
earned in 2011, primarily owing to the impact of an interest rate
hike announced earlier this month. Gentiva had raised the interest
rates on the term loans taken under its senior secured credit
facility by 1.75% per annum, as a part of an amendment to its
senior secured credit agreement.
Other amendments include alteration of the definition of
consolidated earnings before interest, taxes, depreciation and
amortization (EBITDA), increase in the maximum limit for the
consolidated leverage ratio and relaxation of the minimum interest
coverage ratio requirement. The earnings guidance includes the
impact of the amendments to the senior secured credit
agreement.
Additionally, Gentiva affirmed its adjusted EBITDA projection of
$170-190 million and net revenue guidance of $1.70-1.76 billion for
2012. The Zacks Consensus Estimate for the company's 2012 revenue
stands at the upper limit of the guidance range at $1.76 billion.
Its adjusted EBITDA guidance excludes expenses related to
acquisitions, restructuring, integration activities, cost saving
initiatives, legal settlements and other special charges.
Concurrently, Gentiva announced a stock repurchase plan under
Rule 10b5-1 of the U.S. Securities and Exchange Commission. The
rule allows the company to override restrictions on buybacks
imposed due to access to substantial non-public information or
self-imposed trading black out periods. Thus, the company can
appoint a broker to buy shares in its name under the present share
repurchase authorization, subject to certain regulatory, pricing,
volume and timing restrictions.
Another healthcare company,
Molina Healthcare Inc.
(
MOH
) provided its operating earnings guidance of $1.80 per share for
2012, marginally ahead of the Zacks Consensus Estimate of
$1.75.
Shares of Gentiva currently carry a Zacks #2 Rank, implying a
short-term 'Buy' rating. Furthermore, considering the fundamentals,
we maintain our long-term 'Neutral' recommendation on the
shares.
GENTIVA HEALTH (
GTIV
): Free Stock Analysis Report
MOLINA HLTHCR (
MOH
): Free Stock Analysis Report
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