Updated Research Report on Healthways - Analyst Blog

On May 27, we have updated our research report on Healthways Inc. ( HWAY ). We appreciate the company's upbeat 2014 first quarter results and promising earnings and revenues guidance for 2014.

Healthways posted a loss per share of 7 cents in the first quarter of 2014, lower than the loss of 12 cents in the prior-year quarter, an improvement of 41.7% year over year. The loss was also narrower than the Zacks Consensus Estimate of a loss of 11 cents per share.

Revenues for the quarter came in at $176.8 million, increasing 7.0% from $165.2 million in the year-ago quarter. Revenues were in line with the Zacks Consensus Estimate.

Brisk contract activity may enable Healthways to gradually get over the loss of the Cigna Corp. contract. In the 2014-first quarter, the company signed 20 contracts, including 5 with new customers, 7 expansions and 8 extensions.

Healthways revealed a positive outlook for 2014. The company expects adjusted earnings in the range of 11 to 26 cents per share for 2014 compared with the loss of 19 cents in 2013. Revenue guidance for 2014 remained in the range of $730 million to $760 million, reflecting an increase of approximately 10-15% over 2013.

Healthways expects revenues and earnings to grow sequentially through the year from first-quarter levels, primarily driven by new business wins, timing of recognizing performance-based fees and expanding revenues under existing contracts.

Currently, Healthways retains a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical instrument industry include ICON Public Limited Company ( ICLR ), Omnicare Inc. ( OCR ), and Quintiles Transnational Holdings Inc. ( Q ).

ICON Public sports a Zacks Rank #1 (Strong Buy), while both Omnicare and Quintiles Transnational retain a Zacks Rank #2 (Buy).

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HEALTHWAYS INC (HWAY): Free Stock Analysis Report

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ICON PLC (ICLR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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