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DaVita (DVA) Earnings Beat Estimates in Q2, Revenues Miss

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DaVita Inc. (DVA - Free Report) reported second-quarter 2020 adjusted earnings per share (EPS) of $1.95, beating the Zacks Consensus Estimate of $1.29 by 51%. The bottom line also reflects a significant 59.8%improvement from the year-ago quarter figure.

Total revenues in the quarter rose 1.4% year over year to $2.88 billion, missing the Zacks Consensus Estimate by 1.1%.

Segment Details

Net dialysis and related lab patient service revenues in the second quarter totaled $2.76 billion, up 1.1% on a year-over-year basis. Other revenues were $121.8 million, up 2.4% from the year-ago quarter’s figure.

Per management, total U.S. dialysis treatments for the second quarter were 7,570,908, or an average 97,063 treatments per day. This represents a per-day increase of 0.7% on a year-over-year basis.

Also, as of Jun 30, 2020 the company provided dialysis services to a total of approximately 236,800 patients at 3,082 outpatient dialysis centers, of which 2,795 centers were located in the United States and 287 centers in 10 other countries.

During the quarter, DaVita opened a total of 28 new dialysis centers and acquired one in the country. It also took over three dialysis centers and opened two outside of the United States.However, during the second quarter, the company also closed six dialysis centers in the United States.

DaVita Inc. Price, Consensus and EPS Surprise


DaVita Inc. Price, Consensus and EPS Surprise

DaVita Inc. price-consensus-eps-surprise-chart | DaVita Inc. Quote


Total operating expenses and charges amounted to $2.47 billion, compared with $2.38 billion in the year -ago period.

Adjusted operating income of $461.2 million fell 0.9% from the prior-year quarter. Adjusted operating margin came in at 16%, down 20 basis points (bps) from the year-ago quarter.

Financial Condition

DaVita exited the second quarter with cumulative net cash from operating activities of $1.01 billion compared with $751.1 million in the year-ago quarter.


DaVita has reaffirmed the 2020 revenue range between $11.50 billion and $11.70 billion. The Zacks Consensus Estimate for the same is pegged at $11.68 billion.

Adjusted EPS projection has been updated to the range of $6.25-$6.75 compared with the previously-issued $5.75-6.25. The Zacks Consensus Estimate for the same stands at $6.13.

Adjusted operating income margin is estimated in the band of 14-14.75% (up from the prior-guided range of 13-14%).

Our Take

DaVita ended the second quarter on a mixed note. The significant improvement in the bottom line is encouraging. Dialysis services in the United States showcased solid results during the quarter and ramped up overseas. The acquisition of several dialysis centers overseas is encouraging. A solid guidance for 2020 is another positive. However, foreign exchange headwinds and stiff competition continue to weigh on the company.

Zacks Rank and Key Picks

DaVita currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. (TMO - Free Report) , PerkinElmer, Inc. (PKI - Free Report) and OPKO Health (OPK - Free Report) . While OPKO Health carries a Zacks Rank #2 (Buy), the other two carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion outpaced the consensus mark by 0.1%.

PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, surpassing the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.

OPKO Health  reported second-quarter 2020 EPS of 5 cents, against  the Zacks Consensus Estimate of loss of 7 cents per share. Revenues of $301.2 million surpassed the consensus estimate by 28.4%.

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