Health Management Associates
), a leading operator of general acute care hospitals, recently
previewed earnings results for the first quarter of 2013.
Health Management expects net revenues of about $1.48 billion
from continuing operations for the first quarter. The
company expects adjusted EBITDA in the range of $192 million to
$196 million. Earnings per share from continuing operations
(attributable to the company and excluding costs associated with
debt) are expected to be 8 cents or 9 cents. Upon exclusion of
about 4 cents of expense for interest rate swap, diluted earnings
per share should be 12 cents or 13 cents.
Adjusted admissions are expected to drop about 5.7% in the
first quarter and admissions should be down 8.8% (both for
continuing same hospital operations). Provision for doubtful
debts for the reported quarter should be between 14% and 14.2%,
higher than 11.9% in the prior-year quarter.
For 2013, the company guided to net revenues (before bad
debts) of $6.8 billion to $7.0 billion and same hospital adjusted
admissions growth in the range of (3%) to 0.0%. The company
expects adjusted EBITDA of $978 million to $1,010 million for
2013 and provision for doubtful debts, as a proportion of
revenues, is pegged in the range of 14% to 15%. Earnings from
continuing operations (attributable to Health Management) are
expected to be between 86 cents and 95 cents.
Health Management is engaged in the ownership and operation of
general acute care hospitals in non-urban communities across the
U.S. The company is an active acquirer of underperforming
hospitals with a turnaround potential in high-growth markets. The
company runs 71 hospitals with about 11,000 beds in rural and
semi-urban areas across the country. Health Management's
competitors in niche markets include
Community Health Systems
Health Management should benefit from a gradual growth in
admissions largely due to improvements in Emergency Room,
sustained physician recruitment and service development.
Moreover, it is well placed to expand margins from continuing
operations and drive above-industry average earnings growth.
However, the debt burden for the company remains sizeable.
The stock carries a Zacks Rank #3 (Hold).
Given Imaging Ltd.
) are Zacks Rank #1 (Strong Buy) stocks, which are expected to do
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