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DaVita Inc. (DVA - Free Report) delivered adjusted earnings per share (EPS) of $2.08 in the second quarter of 2023, up 31.6% sequentially. The figure topped the Zacks Consensus Estimate by 25.3%.
GAAP EPS for the quarter was $1.91, reflecting a plunge of 16.9% year over year.
Revenues in Detail
Revenues of $3.00 billion in the second quarter were up by 2.5% year over year. The figure surpassed the Zacks Consensus Estimate by 1.9%.
The top line was driven by solid performances by DaVita’s dialysis patient service revenues.
Segment Details
The company’s dialysis patient service revenues were $2.89 billion, up by 2.9% year over year. This figure compares to our dialysis patient service revenues’ second-quarter projection of $2.79 billion.
Other revenues were $109.7 million, down 5.9% from the year-ago quarter’s figure. This figure compares to our second-quarter projection of $134.3 million.
Per management, the total U.S. dialysis treatments for the second quarter were 7,231,242 or 92,708 per day, on average. This represents a per-day increase of 0.3% on a sequential basis.
As of Jun 30, 2023, DaVita provided dialysis services to around 248,000 patients at 3,056 outpatient dialysis centers, of which 2,703 were U.S. centers while 353 were located across 11 other countries.
During the second quarter of 2023, the company opened a total of 10 new dialysis centers and closed 16 dialysis centers in the United States. It also acquired two dialysis centers, opened two and closed two dialysis centers outside the United States in the same period.
In the quarter under review, DaVita’s gross profit rose 3.8% to $944.5 million. The gross margin expanded 39 basis points (bps) to 31.5%.
We had projected 29.6% of gross margin for the second quarter.
General & administrative expenses climbed 15.5% to $364 million.
Adjusted operating profit totaled $580.5 million, reflecting a 2.4% plunge from the prior-year quarter’s level. Adjusted operating margin in the second quarter contracted 97 bps to 19.3%.
Financial Position
DaVita exited the second quarter of 2023 with cash and cash equivalents and short-term investments of $339.9 million compared with $367.1 million at the first-quarter end. Total debt (including the current portion) at the end of second-quarter 2023 was $8.69 billion compared with $8.66 billion at the first-quarter end.
Cumulative net cash flow from operating activities at the end of second-quarter 2023 was $912.7 million compared with $510.3 million a year ago.
2023 Guidance
DaVita has raised its adjusted EPS outlook for 2023.
Adjusted EPS from continuing operations for the full year is now projected to be in the range of $7.00-$7.80, up from the prior outlook of $6.20-$7.30. The Zacks Consensus Estimate for the same currently stands at $6.71.
Our Take
DaVita ended the second quarter of 2023 with better-than-expected results. The uptick in the company’s overall top line and dialysis patient service revenues during the period was impressive. The increase in total U.S. dialysis treatments during the quarter was also encouraging. The opening of several dialysis centers within the United States and overseas was promising. The gross margin expansion bodes well for the stock. DaVita raising its EPS outlook for the year also raises our optimism.
However, the decline in Other revenues was disappointing. The contraction of adjusted operating margin also does not bode well for the company. The company faced continued cost inflationary pressure during the reported quarter, which was further concerning.
Zacks Rank and Key Picks
DaVita currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, Integer Holdings Corporation (ITGR - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
BD, carrying a Zacks Rank of 2 (Buy), reported third-quarter fiscal 2023 adjusted EPS of $2.96, beating the Zacks Consensus Estimate by 2.4%. Revenues of $4.88 billion outpaced the consensus mark by 1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BD has a long-term estimated growth rate of 10.1%. BDX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 4.7%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.
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DaVita (DVA) Tops Q2 Earnings Estimates, Ups FY23 EPS View
DaVita Inc. (DVA - Free Report) delivered adjusted earnings per share (EPS) of $2.08 in the second quarter of 2023, up 31.6% sequentially. The figure topped the Zacks Consensus Estimate by 25.3%.
GAAP EPS for the quarter was $1.91, reflecting a plunge of 16.9% year over year.
Revenues in Detail
Revenues of $3.00 billion in the second quarter were up by 2.5% year over year. The figure surpassed the Zacks Consensus Estimate by 1.9%.
The top line was driven by solid performances by DaVita’s dialysis patient service revenues.
Segment Details
The company’s dialysis patient service revenues were $2.89 billion, up by 2.9% year over year. This figure compares to our dialysis patient service revenues’ second-quarter projection of $2.79 billion.
Other revenues were $109.7 million, down 5.9% from the year-ago quarter’s figure. This figure compares to our second-quarter projection of $134.3 million.
Per management, the total U.S. dialysis treatments for the second quarter were 7,231,242 or 92,708 per day, on average. This represents a per-day increase of 0.3% on a sequential basis.
As of Jun 30, 2023, DaVita provided dialysis services to around 248,000 patients at 3,056 outpatient dialysis centers, of which 2,703 were U.S. centers while 353 were located across 11 other countries.
During the second quarter of 2023, the company opened a total of 10 new dialysis centers and closed 16 dialysis centers in the United States. It also acquired two dialysis centers, opened two and closed two dialysis centers outside the United States in the same period.
DaVita Inc. Price, Consensus and EPS Surprise
DaVita Inc. price-consensus-eps-surprise-chart | DaVita Inc. Quote
Margin Details
In the quarter under review, DaVita’s gross profit rose 3.8% to $944.5 million. The gross margin expanded 39 basis points (bps) to 31.5%.
We had projected 29.6% of gross margin for the second quarter.
General & administrative expenses climbed 15.5% to $364 million.
Adjusted operating profit totaled $580.5 million, reflecting a 2.4% plunge from the prior-year quarter’s level. Adjusted operating margin in the second quarter contracted 97 bps to 19.3%.
Financial Position
DaVita exited the second quarter of 2023 with cash and cash equivalents and short-term investments of $339.9 million compared with $367.1 million at the first-quarter end. Total debt (including the current portion) at the end of second-quarter 2023 was $8.69 billion compared with $8.66 billion at the first-quarter end.
Cumulative net cash flow from operating activities at the end of second-quarter 2023 was $912.7 million compared with $510.3 million a year ago.
2023 Guidance
DaVita has raised its adjusted EPS outlook for 2023.
Adjusted EPS from continuing operations for the full year is now projected to be in the range of $7.00-$7.80, up from the prior outlook of $6.20-$7.30. The Zacks Consensus Estimate for the same currently stands at $6.71.
Our Take
DaVita ended the second quarter of 2023 with better-than-expected results. The uptick in the company’s overall top line and dialysis patient service revenues during the period was impressive. The increase in total U.S. dialysis treatments during the quarter was also encouraging. The opening of several dialysis centers within the United States and overseas was promising. The gross margin expansion bodes well for the stock. DaVita raising its EPS outlook for the year also raises our optimism.
However, the decline in Other revenues was disappointing. The contraction of adjusted operating margin also does not bode well for the company. The company faced continued cost inflationary pressure during the reported quarter, which was further concerning.
Zacks Rank and Key Picks
DaVita currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, Integer Holdings Corporation (ITGR - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
BD, carrying a Zacks Rank of 2 (Buy), reported third-quarter fiscal 2023 adjusted EPS of $2.96, beating the Zacks Consensus Estimate by 2.4%. Revenues of $4.88 billion outpaced the consensus mark by 1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BD has a long-term estimated growth rate of 10.1%. BDX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 4.7%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.