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DaVita's (DVA) Q4 Earnings Surpass Estimates, Margins Up
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DaVita Inc. (DVA - Free Report) delivered adjusted earnings per share (“EPS”) of $2.02 in the fourth quarter of 2021, up 20.9% year over year. The figure surpassed the Zacks Consensus Estimate by 12.2%.
GAAP EPS for the quarter was $1.79, reflecting a 7.2% surge from the year-earlier figure.
Full-year adjusted EPS was $9.13, reflecting a 25.8% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 2.7%.
Revenues in Detail
Revenues of $2.94 billion in the fourth quarter were up 1.3% year over year. The figure exceeded the Zacks Consensus Estimate by 1%.
Management noted that despite the current surge in COVID-19 cases, the company delivered robust performances. It also estimates that incremental mortality due to COVID-19 was around 1,100 compared with approximately 1,600 during the sequentially last-reported quarter.
Full-year revenues were $11.62 billion, reflecting a 0.6% improvement from the year-ago period. The metric topped the Zacks Consensus Estimate by 0.3%.
The company’s dialysis patient service revenues were $2.84 billion, up 2.5% year over year. Other revenues were $100.9 million, down 23.6% from the year-ago quarter’s figure.
Per management, total U.S. dialysis treatments for the fourth quarter were 7,455,560 or 94,374 per day, on average. This represents a per-day decrease of 1.6% on a year-over-year basis.
As of Dec 31, 2021, DaVita provided dialysis services to around 243,000 patients at 3,154 outpatient dialysis centers, of which 2,815 were U.S. centers while 339 were located across 10 other countries.
During the fourth quarter of 2021, the company acquired 17 dialysis centers, opened a total of two dialysis centers and closed 30 in the United States. It also acquired seven dialysis centers, opened two and closed three outside the United States in the same period.
Margin Details
In the quarter under review, DaVita’s gross profit rose 4.2% to $883.7 million. Gross margin expanded 82 basis points (bps) to 30%.
General & administrative expenses climbed 5.9% to $322.7 million.
Adjusted operating profit totaled $561 million, reflecting a 3.1% uptick from the prior-year quarter’s level. Adjusted operating margin in the fourth quarter expanded 34 bps to 19.1%.
Financial Position
DaVita exited full-year 2021 with cash and cash equivalents, and short-term investments of $484.2 million compared with $345.1 million at the end of 2020. Total debt (including current portion) at the end of full-year 2021 was $8.91 billion compared with $8.09 billion at the end of 2020.
Cumulative net cash flow from operating activities at the end of 2021 was $1.93 billion compared with $1.98 billion a year ago.
DaVita repurchased 6,127,556 shares of its common stock for $647 million during the reported quarter. Management also informed that from Dec 31, 2021 to Feb 9, 2022, the company repurchased 1,437,107 shares of its common stock for $159 million.
2022 Guidance
DaVita has initiated its financial outlook for full-year 2022.
Adjusted EPS for the full year is projected to be $7.50-$8.50. The Zacks Consensus Estimate for the same currently stands at $8.16.
Our Take
DaVita ended the fourth quarter of 2021 with better-than-expected results. The company registered improvement in the overall top line, along with strong dialysis patient service revenues during the period, which is impressive. The acquisition of several dialysis centers, both within the United States and overseas, is encouraging as well. The expansion of both margins also bodes well for the stock.
However, a fall in the company’s Other revenues during the fourth quarter is concerning. Per-day decrease in total U.S. dialysis treatments is also discouraging. 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 that are supposed to report earnings soon are Henry Schein, Inc. (HSIC - Free Report) , Baxter International (BAX - Free Report) and AMN Healthcare Services, Inc. (AMN - Free Report) .
The Zacks Consensus Estimate for Henry Schein’s fourth-quarter 2021 adjusted EPS is currently pegged at 90 cents. The consensus estimate for fourth-quarter 2021 revenues is pegged at $3.18 billion. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings yield of 6.1% compares favorably with the industry’s 4.1%.
Baxter currently has a Zacks Rank #2. The Zacks Consensus Estimate for its fourth-quarter 2021 adjusted EPS is currently pegged at $1.03. The consensus estimate for fourth-quarter revenues is pinned at $3.35 billion.
Baxter has an estimated long-term growth rate of 9.5%. BAX’s earnings yield of 4.8% compares favorably with the industry’s negative yield.
AMN Healthcare currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its fourth-quarter 2021 adjusted EPS is currently pegged at $2.58. The consensus estimate for its revenues stands at $1.28 billion.
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings yield of 6.4% compares favorably with the industry’s 0.7%.
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DaVita's (DVA) Q4 Earnings Surpass Estimates, Margins Up
DaVita Inc. (DVA - Free Report) delivered adjusted earnings per share (“EPS”) of $2.02 in the fourth quarter of 2021, up 20.9% year over year. The figure surpassed the Zacks Consensus Estimate by 12.2%.
GAAP EPS for the quarter was $1.79, reflecting a 7.2% surge from the year-earlier figure.
Full-year adjusted EPS was $9.13, reflecting a 25.8% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 2.7%.
Revenues in Detail
Revenues of $2.94 billion in the fourth quarter were up 1.3% year over year. The figure exceeded the Zacks Consensus Estimate by 1%.
Management noted that despite the current surge in COVID-19 cases, the company delivered robust performances. It also estimates that incremental mortality due to COVID-19 was around 1,100 compared with approximately 1,600 during the sequentially last-reported quarter.
Full-year revenues were $11.62 billion, reflecting a 0.6% improvement from the year-ago period. The metric topped the Zacks Consensus Estimate by 0.3%.
DaVita Inc. Price, Consensus and EPS Surprise
DaVita Inc. price-consensus-eps-surprise-chart | DaVita Inc. Quote
Segment Details
The company’s dialysis patient service revenues were $2.84 billion, up 2.5% year over year. Other revenues were $100.9 million, down 23.6% from the year-ago quarter’s figure.
Per management, total U.S. dialysis treatments for the fourth quarter were 7,455,560 or 94,374 per day, on average. This represents a per-day decrease of 1.6% on a year-over-year basis.
As of Dec 31, 2021, DaVita provided dialysis services to around 243,000 patients at 3,154 outpatient dialysis centers, of which 2,815 were U.S. centers while 339 were located across 10 other countries.
During the fourth quarter of 2021, the company acquired 17 dialysis centers, opened a total of two dialysis centers and closed 30 in the United States. It also acquired seven dialysis centers, opened two and closed three outside the United States in the same period.
Margin Details
In the quarter under review, DaVita’s gross profit rose 4.2% to $883.7 million. Gross margin expanded 82 basis points (bps) to 30%.
General & administrative expenses climbed 5.9% to $322.7 million.
Adjusted operating profit totaled $561 million, reflecting a 3.1% uptick from the prior-year quarter’s level. Adjusted operating margin in the fourth quarter expanded 34 bps to 19.1%.
Financial Position
DaVita exited full-year 2021 with cash and cash equivalents, and short-term investments of $484.2 million compared with $345.1 million at the end of 2020. Total debt (including current portion) at the end of full-year 2021 was $8.91 billion compared with $8.09 billion at the end of 2020.
Cumulative net cash flow from operating activities at the end of 2021 was $1.93 billion compared with $1.98 billion a year ago.
DaVita repurchased 6,127,556 shares of its common stock for $647 million during the reported quarter. Management also informed that from Dec 31, 2021 to Feb 9, 2022, the company repurchased 1,437,107 shares of its common stock for $159 million.
2022 Guidance
DaVita has initiated its financial outlook for full-year 2022.
Adjusted EPS for the full year is projected to be $7.50-$8.50. The Zacks Consensus Estimate for the same currently stands at $8.16.
Our Take
DaVita ended the fourth quarter of 2021 with better-than-expected results. The company registered improvement in the overall top line, along with strong dialysis patient service revenues during the period, which is impressive. The acquisition of several dialysis centers, both within the United States and overseas, is encouraging as well. The expansion of both margins also bodes well for the stock.
However, a fall in the company’s Other revenues during the fourth quarter is concerning. Per-day decrease in total U.S. dialysis treatments is also discouraging. 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 that are supposed to report earnings soon are Henry Schein, Inc. (HSIC - Free Report) , Baxter International (BAX - Free Report) and AMN Healthcare Services, Inc. (AMN - Free Report) .
The Zacks Consensus Estimate for Henry Schein’s fourth-quarter 2021 adjusted EPS is currently pegged at 90 cents. The consensus estimate for fourth-quarter 2021 revenues is pegged at $3.18 billion. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings yield of 6.1% compares favorably with the industry’s 4.1%.
Baxter currently has a Zacks Rank #2. The Zacks Consensus Estimate for its fourth-quarter 2021 adjusted EPS is currently pegged at $1.03. The consensus estimate for fourth-quarter revenues is pinned at $3.35 billion.
Baxter has an estimated long-term growth rate of 9.5%. BAX’s earnings yield of 4.8% compares favorably with the industry’s negative yield.
AMN Healthcare currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its fourth-quarter 2021 adjusted EPS is currently pegged at $2.58. The consensus estimate for its revenues stands at $1.28 billion.
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings yield of 6.4% compares favorably with the industry’s 0.7%.