Kindred Healthcare Inc.
Kindred Healthcare provides healthcare in over 40 states at 655 locations, including 82 long-term acute care hospitals, 228 skilled nursing centers and contract rehabilitation services called Peoplefirst.
Healthy Results
On Feb 19, Kindred Healthcare reported fourth-quarter 2008 earnings that surprised on Wall Street estimates by 47.37%. Net income rose 11% to $21.8 million from $19.6 million. Earnings per share were 56 cents compared 51 cents in the fourth-quarter of 2007. Analysts expected only 38 cents.
Revenue increased 5% to $1.1 billion compared to $1.0 billion in 2007. All three of the company's divisions saw gains in the quarter.
"In our hospital business, favorable rates and improved revenue mix resulted in better than expected operating margins in the period," said Paul J. Diaz, President and Chief Executive Officer.
"Our nursing centers continued to report stable operating results despite some softness in our Medicare volumes as we again executed on our plan of improving employee retention, our quality indicators and customer satisfaction levels."
"Peoplefirst Rehabilitation reported its eighteenth quarter of sequentially higher revenues as we further expanded our external customer base and improved our cost metrics," he added.
Steady Revisions
Analysts’ revisions of earnings forecasts have been stable for the most part, calling for current full-year projections of $1.38 per share.
During the past 4 consecutive quarters, the company outpaced analysts’ estimates by an average of 37%.
Earnings per share growth is expected to come in at about 12.5% over the next 3 – 5, which is in line with the industry average.
Value Fundamentals
Kindred Healthcare is a Zacks #1 Rank (strong buy) stock. It is trading with a forward P/E of 9.81 KND has a PEG ratio of 0.86. The company’s price-to-book is 0.63.