Back to top

Image: Bigstock

DaVita (DVA) Earnings and Revenues Miss Estimates in Q1

Read MoreHide Full Article
DaVita Inc. (DVA - Free Report) reported first-quarter 2019 adjusted earnings per share (EPS) of 91 cents, missing the Zacks Consensus Estimate of 95 cents. However, the figure declined 13.3% on a year-over-year basis.
 
Total revenues in the quarter declined 2.8% year over year to $2.74 billion, missing the Zacks Consensus Estimate of $2.82 billion.
 
First-quarter adjusted operating income totaled $382 million, down 7.1% year over year.

DaVita Inc. Price, Consensus and EPS Surprise

 

DaVita Inc. Price, Consensus and EPS Surprise | DaVita Inc. Quote

Segment Details
 
This Zacks Rank #4 (Sell) company reports through two main segments — Net dialysis and related lab patient service revenues and Other revenues.
 
Net dialysis and related lab patient service revenues in the first quarter totaled $2.63 billion, up 0.5% on a year-over-year basis. Other revenues were $113.4 million, significantly down from the year-ago quarter’s $232.8 million.
 
Per management, total U.S. dialysis treatments for the first quarter was 7,297,460, or 95,267 treatments per day, representing a day’s increase of 2.9% over first-quarter 2018.
 
Moreover, the company provided dialysis services at 2,932 outpatient dialysis centers, of which 2,689 centers were located in the United States and 243 centers in nine countries outside the United States.
 
U.S. dialysis and related lab services revenues grossed $2.55 billion, down 3.3% from the prior-year quarter. International dialysis patient service and other revenues totaled $120 million, up 3.2% year over year.
 
For investors’ notice, the company is on track to divest its major segment — DaVita Medical Group (DMG) — to Optum, a subsidiary of UnitedHealth Group Inc. Notably, the purchase price has been reduced to $4.3 billion from $4.9 billion. This transaction is subject to regulatory approvals and other customary closing conditions. The operations of DMG business have been reported as discontinued.
 
Financial Condition
 
DaVita exited the first quarter with operating cash flow of $141 million.
 
Guidance
 
For 2019, DaVita continues to expect operating income at the band of $1.54 billion to $1.64 billion.
 
Operating cash flow for the year is projected between $1.38 billion and $1.58 billion.
 
Effective income tax rate on income from continuing operations attributable to the company is projected between 28.5% and 29.5% for 2019.
 
Our Take
 
DaVita ended the first quarter on a dull note. Dialysis services in the United States saw a solid quarter. DaVita’s international dialysis revenues rose year over year in the quarter. The company is on track to acquire more dialysis centers in the United States. Additionally, a recent win against the union-backed ballot in California is indicative of bright prospects.
 
On the flip side, DaVita U.S. Dialysis revenues were soft in the first quarter. The year-over-year decline in top and bottom line raises concern. Sluggishness in Other business has been another headwind.
 
Earnings of MedTech Majors at a Glance
 
Some better-ranked stocks which reported solid results this earning season are Stryker Corporation (SYK - Free Report) , DENTSPLY SIRONA (XRAY - Free Report) and CONMED Corporation (CNMD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
 
Stryker delivered first-quarter 2019 adjusted EPS of $1.88, beating the Zacks Consensus Estimate by 2.2%. Revenues of $3.52 billion were in line with the consensus estimate.
 
DENTSPLY reported adjusted EPS of 49 cents in the first quarter of 2019, beating the Zacks Consensus Estimate of 38 cents. Revenues came in at $946.2 million and surpassed the Zacks Consensus Estimate of $917.1 million.
 
CONMED posted first-quarter 2019 adjusted EPS of 57 cents, which beat the Zacks Consensus Estimate of 54 cents. Revenues were $218.4 million, surpassing the consensus estimate of $213 million.
 
Breakout Biotech Stocks with Triple-Digit Profit Potential
 
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
 
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Stryker Corporation (SYK) - free report >>

DaVita Inc. (DVA) - free report >>

DENTSPLY SIRONA Inc. (XRAY) - free report >>

CONMED Corporation (CNMD) - free report >>