On Mar 7, 2013, we retained
) at Neutral after the company missed Zacks Consensus Estimate
for earnings while reporting in line revenues for fourth quarter
2012. Healthways is still recovering from the loss of the Cigna
Why the Retention?
Healthways released its results for the fourth quarter on Feb
7. The company posted adjusted earnings per share of 5 cents per
share, missing the Zacks Consensus Estimate by a penny. Revenues
in the reported quarter dropped 2.7% year over year to $175
million, in line with the Zacks Consensus Estimate.
Over the past 60 days, the Zacks Consensus Estimate for 2013
has dropped by 5 cents to 30 cents. For 2014, the Zacks Consensus
Estimate has declined by 6 cents to 58 cents during the same
For 2013, Healthways continues to expect sales in a band of
$710 million and $750 million, up 5% to 11% year over year. HWAY
expects higher revenues for 2013 despite a drop of $80 million
from the end of the Cigna and one other contract. Healthways
forecasts higher sales in the second half of 2013 as fresh
contracts inked in 2012 will take 6 months to 24 months to take
Healthways guided to earnings per share of about 25 cents to
35 cents for 2013. Loss per share is expected to be 15 cents for
the first quarter of 2013.
The Healthways model encourages people to make favorable
lifestyle changes that lead to enhanced well-being, reduced
healthcare costs, improved performance and economic value for
customers. Healthways is the leader in a strategically critical
and rapidly evolving part of the health care services market. Its
fitness program (SilverSneakers) for seniors is available at over
15,000 centers across the U.S. and caters to over nine million
eligible enrollees. Healthways competes with
Express Scripts Holding Company
) among others.
Other Stocks to Consider
We currently have a Zacks Rank #3 (Hold) on Healthways. We are
more positive about
Air Methods Corp.
), which carry a Zacks Rank #1 (Strong Buy) and Zacks Rank #2
(Buy), respectively, and are expected to do well.
AIR METHODS CRP (AIRM): Free Stock Analysis
COVANCE INC (CVD): Free Stock Analysis Report
EXPRESS SCRIPTS (ESRX): Free Stock Analysis
HEALTHWAYS INC (HWAY): Free Stock Analysis
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