We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Acadia Healthcare (ACHC) Beats on Q2 Earnings & Revenues
Read MoreHide Full Article
Shares of Acadia Healthcare Company Inc (ACHC - Free Report) have had a crazy run since the company posted second-quarter 2016 results on Jul 29. The stock rallied 6% immediately after the announcement to close the day at $56.50. However, shares plunged 7% to $52.59 in the following trading session (Aug 1).
The drop in share price reflected the lowered earnings guidance for full-year 2016. Notably, the company reported adjusted earnings of 73 cents per share, which beat the Zacks Consensus Estimate by a penny. Further, earnings improved 28.1% on a year-over-year basis.
The upside was driven primarily by a 66.8% increase in revenues to around $756.5 million, which was also ahead of the Zacks Consensus Estimate of $756 million. The revenue growth may be attributed to the higher revenue contribution from strategic acquisitions and addition of beds at Acadia’s facilities.
We note that Acadia added 125 new beds to existing facilities in the U.S. and U.K. Moreover, the company opened a de novo facility with 60 new beds in the reported quarter.
Same facility revenues increased 8.1% on a year-over-year basis, mainly owing to a 7.7% increase in patient days. Notably, revenue per patient day surged 0.4%.
The U.S. same facility revenues were up 8.5% from the year-ago quarter. There was also a significant increase in patient days, which rose 7.5% compared from a year ago.
The U.K. same facility revenues also increased 6.7% on a year-over-year basis to $84.7 million. Number of patient days rose 8.8% from the year-ago quarter.
We note that revenues per patient day surged 1% in the U.S. but declined 1.9% in the U.K.
Margin Details
Same facility adjusted EBITDA margin expanded 70 basis points (bps) to 28.1%. We note that the U.S. same facility adjusted EBITDA margin expanded 60 bps, while the U.K. same facility adjusted EBITDA margin expanded 110 bps in the reported quarter.
The margins expanded primarily because of rising patient days and strong same facility revenues. Moreover, addition of new beds has driven organic growth at the company.
Acquisitions
Acadia Healthcare diversifies its core business through the acquisition of additional facilities.
Notably, the company completed the acquisition of Priory Group for a total of approximately $2.2 billion in Feb 2016. However, recently, the CMA (Competition and Markets Authority) in the U.K. has kept this acquisition under review.
In the U.S., Acadia Healthcare completed four acquisitions that added approximately 240 beds including an acute psychiatrist inpatient facility, two residential addiction treatment facilities and a comprehensive treatment facility RCDP.
Divestiture
Acadia Healthcare plans to divest 19 of its Priory and PiC healthcare facilities with approximately 750 beds. These facilities generate aggregate annual revenue of approximately $132 million and adjusted EBITDA of $39 million. The company believes that the planned divestiture will help it to address CMA’s concerns and subsequently allow it to complete the Priory acquisition.
Guidance
For full-year 2016, Acadia Healthcare issued its earnings guidance in the range of $2.63–$2.65, from the previously guided range of $2.81--$2.86. The guidance cut is primarily because of foreign exchange volatility and delayed CMA approval in our view.
Acadia Healthcare plans to add to more than 800 beds in full-year 2016. In the first half of 2016, the company added 515 beds.
Zacks Rank & Key Picks
Currently, Acadia Healthcare carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the broader medical sector include ABIOMED Inc. , HCA Holdings Inc. (HCA - Free Report) and VCA Inc. (WOOF - Free Report) . Notably, all the three stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Acadia Healthcare (ACHC) Beats on Q2 Earnings & Revenues
Shares of Acadia Healthcare Company Inc (ACHC - Free Report) have had a crazy run since the company posted second-quarter 2016 results on Jul 29. The stock rallied 6% immediately after the announcement to close the day at $56.50. However, shares plunged 7% to $52.59 in the following trading session (Aug 1).
The drop in share price reflected the lowered earnings guidance for full-year 2016. Notably, the company reported adjusted earnings of 73 cents per share, which beat the Zacks Consensus Estimate by a penny. Further, earnings improved 28.1% on a year-over-year basis.
The upside was driven primarily by a 66.8% increase in revenues to around $756.5 million, which was also ahead of the Zacks Consensus Estimate of $756 million. The revenue growth may be attributed to the higher revenue contribution from strategic acquisitions and addition of beds at Acadia’s facilities.
We note that Acadia added 125 new beds to existing facilities in the U.S. and U.K. Moreover, the company opened a de novo facility with 60 new beds in the reported quarter.
Quarter Details
Same facility revenues increased 8.1% on a year-over-year basis, mainly owing to a 7.7% increase in patient days. Notably, revenue per patient day surged 0.4%.
The U.S. same facility revenues were up 8.5% from the year-ago quarter. There was also a significant increase in patient days, which rose 7.5% compared from a year ago.
ACADIA HEALTHCR Price, Consensus and EPS Surprise
ACADIA HEALTHCR Price, Consensus and EPS Surprise | ACADIA HEALTHCR Quote
The U.K. same facility revenues also increased 6.7% on a year-over-year basis to $84.7 million. Number of patient days rose 8.8% from the year-ago quarter.
We note that revenues per patient day surged 1% in the U.S. but declined 1.9% in the U.K.
Margin Details
Same facility adjusted EBITDA margin expanded 70 basis points (bps) to 28.1%. We note that the U.S. same facility adjusted EBITDA margin expanded 60 bps, while the U.K. same facility adjusted EBITDA margin expanded 110 bps in the reported quarter.
The margins expanded primarily because of rising patient days and strong same facility revenues. Moreover, addition of new beds has driven organic growth at the company.
Acquisitions
Acadia Healthcare diversifies its core business through the acquisition of additional facilities.
Notably, the company completed the acquisition of Priory Group for a total of approximately $2.2 billion in Feb 2016. However, recently, the CMA (Competition and Markets Authority) in the U.K. has kept this acquisition under review.
In the U.S., Acadia Healthcare completed four acquisitions that added approximately 240 beds including an acute psychiatrist inpatient facility, two residential addiction treatment facilities and a comprehensive treatment facility RCDP.
Divestiture
Acadia Healthcare plans to divest 19 of its Priory and PiC healthcare facilities with approximately 750 beds. These facilities generate aggregate annual revenue of approximately $132 million and adjusted EBITDA of $39 million. The company believes that the planned divestiture will help it to address CMA’s concerns and subsequently allow it to complete the Priory acquisition.
Guidance
For full-year 2016, Acadia Healthcare issued its earnings guidance in the range of $2.63–$2.65, from the previously guided range of $2.81--$2.86. The guidance cut is primarily because of foreign exchange volatility and delayed CMA approval in our view.
Acadia Healthcare plans to add to more than 800 beds in full-year 2016. In the first half of 2016, the company added 515 beds.
Zacks Rank & Key Picks
Currently, Acadia Healthcare carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the broader medical sector include ABIOMED Inc. , HCA Holdings Inc. (HCA - Free Report) and VCA Inc. (WOOF - Free Report) . Notably, all the three stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>