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Brookdale Senior (BKD) Shares Rise 1.9% Despite Q3 Earnings Miss
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Brookdale Senior Living Inc. (BKD - Free Report) shares have gained 1.9% since it reported third-quarter results on Nov 6, 2023. Although it missed earnings estimates, investors seemed convinced by the company’s optimistic adjusted EBITDA guidance for the fourth quarter. Also, RevPAR is expected to grow further in the quarter.
Q3 Earnings
Brookdale Senior incurred a third-quarter 2023 adjusted loss of 22 cents per share, wider than the Zacks Consensus Estimate of a loss of 20 cents. The bottom line also widened from an adjusted loss of 15 cents per share in the prior-year quarter.
The top line decreased marginally year over year to $757.3 million. Quarterly results were affected by lower other operating income and higher facility operating expenses, partially offset by increased RevPOR, occupancy rate and resident fee revenues.
Brookdale Senior Living Inc. Price, Consensus and EPS Surprise
Resident fees in the quarter under review jumped 10.3% year over year to $717.1 million, thanks to higher RevPOR and occupancy rate. BKD’s RevPAR for the third quarter jumped 10.7% from a year ago to $4,596, whereas RevPOR rose 9% to $5,919 due to current-year rate increases.
Weighted average occupancy climbed 120 basis points in the quarter to 77.6% with the help of the company’s occupancy rebuild initiatives. However, management fees fell 13.5% year over year to $2.6 million. Also, other operating income declined 96.1% to $2.6 million from the year-ago period due to lower government grants.
Brookdale Senior’s third quarter facility operating expense, excluding certain items, increased 2.3% to $537.4 million due to inflationary pressure and increased referral source costs. This was partially offset by lower premium labor usage.
G&A costs, including certain items, rose 4.2% to $43.1 million in the third quarter. Facility operating lease expenses rose 28.6% to $53.1 million during this period.
The company reported interest income of $6.3 million in the September quarter, up from $2.2 million a year ago. Net loss in the quarter widened to $48.8 million from $28.4 million a year ago due to lower other operating income, higher facility operating expenses and debt interest expenses, partially offset by higher resident fee revenues.
Adjusted EBITDA declined 24.9% to $80.2 million.
Financial Update (as of Sep 30, 2023)
Brookdale Senior exited the third quarter with cash and cash equivalents of $331.7 million, which fell from the 2022-end level of $398.9 million. Total assets of $5.8 billion decreased from the figure of $5.9 billion at 2022 end.
Long-term debt, less current portion, totaled $3.5 billion, down from the $3.9 billion figure as of Dec 31, 2022. The current portion of long-term debt was $304.5 million.
Total equity of $493.3 million decreased from the 2022-end level of $584.2 million.
Net cash flow from operations in the third quarter of the year was recorded at $45.8 million, down from $63.5 million in the year-ago period. Adjusted free cash flow in the quarter was at $2.5 million, down from $4.1 million a year ago.
2023 View
For the fourth quarter, the company expects 9.5-10% year-over-year growth in RevPAR. It expects Adjusted EBITDA to be in the range of $77-$82 million in the December quarter, up from the year-ago level of $46.6 million.
For the full year 2023, it anticipates net capital expenditure for non-development purposes to be around $195 million.
Zacks Rank & Key Picks
Brookdale Senior currently has a Zacks Rank #4 (Sell).
The Zacks Consensus Estimate for Enovis’ current-year earnings implies a 4.9% increase from the year-ago reported figure. The consensus mark for its current year revenues is pegged at $1.7 billion. ENOV beat earnings estimates in each of the last four quarters, with an average surprise of 11%.
The Zacks Consensus Estimate for Centene’s 2023 earnings indicates a 14.9% year-over-year increase to $6.64 per share. It has witnessed eight upward estimate revisions over the past 30 days against no movement in the opposite direction. The consensus mark for CNC’s 2023 revenues indicates 4.4% growth from a year ago.
The Zacks Consensus Estimate for Molina Healthcare’s 2023 bottom line is pegged at $20.83 per share, suggesting 16.2% year-over-year growth. It beat earnings estimates in all the last four quarters, with an average surprise of 7.5%. The consensus mark for MOH’s current year revenues indicates 4.2% growth from a year ago.
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Brookdale Senior (BKD) Shares Rise 1.9% Despite Q3 Earnings Miss
Brookdale Senior Living Inc. (BKD - Free Report) shares have gained 1.9% since it reported third-quarter results on Nov 6, 2023. Although it missed earnings estimates, investors seemed convinced by the company’s optimistic adjusted EBITDA guidance for the fourth quarter. Also, RevPAR is expected to grow further in the quarter.
Q3 Earnings
Brookdale Senior incurred a third-quarter 2023 adjusted loss of 22 cents per share, wider than the Zacks Consensus Estimate of a loss of 20 cents. The bottom line also widened from an adjusted loss of 15 cents per share in the prior-year quarter.
The top line decreased marginally year over year to $757.3 million. Quarterly results were affected by lower other operating income and higher facility operating expenses, partially offset by increased RevPOR, occupancy rate and resident fee revenues.
Brookdale Senior Living Inc. Price, Consensus and EPS Surprise
Brookdale Senior Living Inc. price-consensus-eps-surprise-chart | Brookdale Senior Living Inc. Quote
Q3 Operational Update
Resident fees in the quarter under review jumped 10.3% year over year to $717.1 million, thanks to higher RevPOR and occupancy rate. BKD’s RevPAR for the third quarter jumped 10.7% from a year ago to $4,596, whereas RevPOR rose 9% to $5,919 due to current-year rate increases.
Weighted average occupancy climbed 120 basis points in the quarter to 77.6% with the help of the company’s occupancy rebuild initiatives. However, management fees fell 13.5% year over year to $2.6 million. Also, other operating income declined 96.1% to $2.6 million from the year-ago period due to lower government grants.
Brookdale Senior’s third quarter facility operating expense, excluding certain items, increased 2.3% to $537.4 million due to inflationary pressure and increased referral source costs. This was partially offset by lower premium labor usage.
G&A costs, including certain items, rose 4.2% to $43.1 million in the third quarter. Facility operating lease expenses rose 28.6% to $53.1 million during this period.
The company reported interest income of $6.3 million in the September quarter, up from $2.2 million a year ago. Net loss in the quarter widened to $48.8 million from $28.4 million a year ago due to lower other operating income, higher facility operating expenses and debt interest expenses, partially offset by higher resident fee revenues.
Adjusted EBITDA declined 24.9% to $80.2 million.
Financial Update (as of Sep 30, 2023)
Brookdale Senior exited the third quarter with cash and cash equivalents of $331.7 million, which fell from the 2022-end level of $398.9 million. Total assets of $5.8 billion decreased from the figure of $5.9 billion at 2022 end.
Long-term debt, less current portion, totaled $3.5 billion, down from the $3.9 billion figure as of Dec 31, 2022. The current portion of long-term debt was $304.5 million.
Total equity of $493.3 million decreased from the 2022-end level of $584.2 million.
Net cash flow from operations in the third quarter of the year was recorded at $45.8 million, down from $63.5 million in the year-ago period. Adjusted free cash flow in the quarter was at $2.5 million, down from $4.1 million a year ago.
2023 View
For the fourth quarter, the company expects 9.5-10% year-over-year growth in RevPAR. It expects Adjusted EBITDA to be in the range of $77-$82 million in the December quarter, up from the year-ago level of $46.6 million.
For the full year 2023, it anticipates net capital expenditure for non-development purposes to be around $195 million.
Zacks Rank & Key Picks
Brookdale Senior currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Medical space are Enovis Corporation (ENOV - Free Report) , Centene Corporation (CNC - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Enovis’ current-year earnings implies a 4.9% increase from the year-ago reported figure. The consensus mark for its current year revenues is pegged at $1.7 billion. ENOV beat earnings estimates in each of the last four quarters, with an average surprise of 11%.
The Zacks Consensus Estimate for Centene’s 2023 earnings indicates a 14.9% year-over-year increase to $6.64 per share. It has witnessed eight upward estimate revisions over the past 30 days against no movement in the opposite direction. The consensus mark for CNC’s 2023 revenues indicates 4.4% growth from a year ago.
The Zacks Consensus Estimate for Molina Healthcare’s 2023 bottom line is pegged at $20.83 per share, suggesting 16.2% year-over-year growth. It beat earnings estimates in all the last four quarters, with an average surprise of 7.5%. The consensus mark for MOH’s current year revenues indicates 4.2% growth from a year ago.