Gentiva Health Services Inc.
) has recently disclosed some of the preliminary estimates for the
second quarter of 2014.
The company has scheduled its second quarter earnings release in
the last week of July. Gentiva expects net revenue to reach $496
million in the second quarter, ahead of the Zacks Consensus
Estimate of $491 million. This represents a sequential rise of 1.7%
and a year-over-year rise of nearly 20%. Additionally, the company
reaffirmed its full-year 2014 net revenue guidance in the range
$1.9-$2.1 billion. The Zacks Consensus estimate of $1.986 remains
within the guided range. On realizing the aforementioned revenue
outlook for the second quarter, the company will have earned half
of its targeted revenues for 2014. With Gentiva's ongoing inorganic
growth strategies and increase in episodic admissions, we expect
the company to achieve its target.
Adjusted earnings before interest, tax, depreciation and
amortization (EBITDA) and adjusted operating income for the second
quarter are expected to be $52 million and 33 cents per share,
respectively. The adjusted EBITDA outlook represents a sequential
as well as year-over-year improvement of 33%. On the other hand,
the operating income guidance represents a sequential improvement
of nearly 154% and a year-over-year improvement of 50%. However,
the Zacks Consensus Estimate for the second quarter stands much
lower at 23 cents per share.
Adjusted EBITDA is expected to be in the range of $177-195 million
for full-year 2014. This represents a year-over-year improvement of
Gentiva reaffirmed its 2014 operating earnings to be in the range
of 85 cents-$1.15 per share, translating into a year-over-year
improvement of 102%-174%. The Zacks Consensus Estimate for 2014 is
currently pegged at 91 cents, within the guided range.
Additionally, Gentiva stated that it expects to generate more value
for its shareholders through its strategic plans than
Kindred Healthcare Inc.
) offer. The company has been turning down the offer from Kindred
over the past couple of months as it considers the deal to be
undervalued. In May 2014, Kindred in a hostile bid had offered to
acquire Gentiva for $533 million. Although it discarded the deal,
we believe that with the continued takeover pressure from Kindred,
Gentiva might become more aggressive in enhancing its financial
structure and policies, so as to enhance its shareholders' return
and retain their confidence in the stock.
Gentiva currently carries a Zacks Rank #3 (Hold). However,
better-ranked stocks in the healthcare space that look attractive
at current levels include
). Both stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
AMSURG CORP (AMSG): Free Stock Analysis Report
GENTIVA HEALTH (GTIV): Free Stock Analysis
KINDRED HLTHCR (KND): Free Stock Analysis
RADNET INC (RDNT): Free Stock Analysis Report
To read this article on Zacks.com click here.