Select Medical Holdings Corporation
) unveiled its guidance for 2013. It expects earnings per share
in 2013 between 98 cents and $1.04 on net operating revenues of
$2.95 billion-$3.05 billion. The Zacks Consensus Estimate for
2013 is $1.02 per share, near the mid point of the guidance.
The company also expects to deliver adjusted earnings before
interest, tax depreciation and amortization (EBITDA) in the range
of $400 million-$415 million in 2013.
Select Medical took into account an adverse impact of $5 million
and $10 million annually on net income and adjusted EBITDA,
respectively, for its Outpatient Rehabilitation segment. The
expected negative effect will likely stem from a multiple
procedure payment reduction change included in the American
Taxpayer Relief Act of 2012, effective for outpatient therapy
services from April 1, 2013.
However, the guidance excludes the adverse effects of
sequestration cuts if it comes into effect on or about April 1,
2013. Nevertheless, if effective, the adverse impact might be
about $20 million on net operating revenues and Adjusted EBITDA.
Select Medical estimates effective tax rate at about 40% for
During its third-quarter conference call, Select Medical
reiterated its 2012 guidance. It expects adjusted earnings per
share in the range of $1.01-$1.06. The Zacks Consensus Estimate
was $1.04 per share, within the guided range. Including the loss
from early retirement of debt in the third quarter of 2012 and
its related tax effect, the company estimates 2012 reported
income in the range of 99 cents-$1.04.
It expects to generate net operating revenues in the range of
$2.9 billion-$2.975 billion in 2012, while adjusted EBITDA is
guided to a range of $400 million-$410 million.
Over the last 30 days, only 1 of the 7 estimates was revised
higher for 2013. Given that the company has raised its outlook
for 2013 from that of 2012, we believe that more estimates would
be north bound. This in turn will provide an upside on its Zacks
Rank. Currently, Select Medical carries a Zacks #2 Rank (Buy).
), which competes with Select Medical, had provided a cautious
outlook for 2013 in mid December last year. Aetna expects
earnings per share to be at least $5.40 in 2013. It also
reaffirmed the 2012 EPS expectation of $5.10. Revenues for
full-year 2012 are projected to be approximately $35.5 billion,
and full-year 2013 revenues are projected to grow approximately
9% compared with 2012. The guidance excludes the positive
accretion anticipated from the Coventry acquisition, which is
likely to close next year. Aetna carries a Zacks # 3 Rank
AETNA INC-NEW (AET): Free Stock Analysis
SELECT MEDICAL (SEM): Free Stock Analysis
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