Acadia Healthcare Company Inc(ACHC - Free Report) reported third-quarter 2016 adjusted earnings of 58 cents per share, which missed the Zacks Consensus Estimate by a penny.
Further, earnings deteriorated 6.5% on a year-over-year basis, thanks to lower-than-expected same facility revenues from U.K. operations.
In fact, current market sentiments have been unfavorable for Acadia Healthcare, as the company represents a negative one-year return of roughly 49.6%, much wider than the S&P 500’s -0.54% over the same time frame.
However, the company registered notable 53.1% growth in revenues in the quarter, totaling approximately $735 million. However, revenues failed to impress as it missed the estimate mark by $6 million.
The year-over-year upside in revenues may be attributed to the addition of beds at Acadia’s facilities.
Acadia Healthcare has been chosen as a provider of behavioral health and addiction treatment services to the FBINAA (FBI National Academy Associates), the second largest association in law enforcement in the quarter.
Acadia Healthcare formed a partnership with Ochsner Health System to establish an 82-bed acute psychiatric hospital, serving the greater New Orleans metropolitan area.
Same facility revenues increased 6.2% on a year-over-year basis, mainly owing to a 6.3% rise in patient days. Notably, revenue per patient day remained flat on a year-over-year basis.
The U.S. same facility revenues were up 6.5% from the year-ago quarter. There was also a 6.2% increase in patient days from a year ago.
The U.K. same facility revenues increased 5.1% on a year-over-year basis to $87.1 million. Number of patient days rose 6.3% from the year-ago quarter.
We note that revenues per patient day inched up 0.3% in the U.S. but declined 1.1% in the U.K.
Same facility adjusted EBITDA margin was 26.9% compared to 27.4% in the year-ago quarter. However, addition of new beds has driven organic growth at the company.
Acadia Healthcare revised its full-year guidance.
For full-year 2016, Acadia Healthcare slashed its earnings guidance to the range of $2.41 to $2.42, from the previous $2.63–$2.65. The guidance cut is primarily because of foreign exchange volatility and delayed CMA approval in our view.
For the fourth quarter, adjusted EPS is forecasted in the band of 55 cents to 56 cents.
Zacks Rank & Key Picks
Currently, Acadia Healthcare carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks in the broader medical space include Cardiovascular Systems Inc. (CSII - Free Report) , Exelixis, Inc. (EXEL - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) . Notably, all the companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
Cardiovascular Systems represents a stellar one-year return of 55.1%. Notably, the company has an expected long-term growth of 22.5%.
Exelis has a stupendous one-year return of 66.1%. In the last reported quarter, the company registered an impressive earnings surprise of 40.74%.
IDEXX Laboratories represents a promising one-year return of 48.6%. The company has a long-term expected growth rate of almost 14.8%.
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