Gentiva Q1 Earnings Beats Ests, Down Y/Y - Analyst Blog

Gentiva Health Services, Inc. GTIV reported first-quarter 2014 adjusted earnings of 13 cents per share, surpassing the Zacks Consensus Estimate of 11 cents. However, the figure was below the year-ago quarter earnings of 23 cents per share.

A severe winter witnessed throughout the U.S. weighed heavily on Gentiva's financials and led to the year-over-year fall.

Including cost saving initiatives, along with acquisition and integration activities, goodwill and other long-lived asset impairments and impact of closed locations, Gentiva posted net income of 1 cent, comparing favorably with net loss of $6.73 per share incurred in the year-ago quarter.

Gentiva's net revenue increased 17% year over year to $487.5 million. However, the figure missed the Zacks Consensus Estimate of $498 million. The year-over-year improvement was largely driven by the Harden acquisition and increase in home health episodic revenues.

The Home Health segment's revenues rose 8.4% year over year to $256 million. Growth in Medicare admission was largely responsible for the increase.

Meanwhile, the Hospice segment's revenues declined 2.9% year over year to $174.4 million. This segment has been grappling with lower volumes. Divestitures and the shutdown of offices in this segment has largely affected the results. Gentiva's efforts to reduce direct expenses in this segment led to a sequential improvement in margins. Gentiva expects the segment to recover in the upcoming quarters and succeed in achieving its 2014 full-year goal.

The Community Care segment posted revenues of $57.1 million in the quarter. This unit is expected to increase the referral base for Home Health and Hospice to the dual eligibles and thus contribute positively to the overall company growth, going ahead.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) attributable to continuing operations dropped 0.2% year over year to $38.98 million.

Financial Update

As March 31, 2014, cash and cash equivalents of Gentiva was $62.9 million, down from $86.96 million as of Dec 31, 2013. As of March 31, 2014, long-term debt of the company was $1.1 billion, almost in line with year-end 2013.

Net cash used in operating activities amounted to $17.7 million in the first quarter of 2014, compared with $20.6 million in the first quarter of 2013. For the first quarter of 2014, free cash flow was ($20.9) million as against ($23.3) million in the year-ago quarter.

As of March 31, 2014, Gentiva had total assets of $1.2 billion, lower than $1.3 billion as of Dec 31, 2013 and shareholder equity of ($297.6) million compared with ($300.2) million as of Dec 31, 2013.

2014 Outlook

Gentiva reiterated its net revenue guidance for 2014 within the $1.9–$2.1 billion range. The company also maintained its adjusted income attributable to shareholders outlook between 85 cents and $1.15 per share. The Zacks Consensus Estimate is currently pegged at 88 cents per share, lying within the guided range. The 2014 outlook takes into account the full-year effect of the Harden acquisition and the CMS issued 2014 Medicare home health and hospice reimbursement rates.

Others

WellPoint Inc. WLP reported first-quarter 2014 adjusted income of $2.30 per share, beating the Zacks Consensus Estimate of $2.12 per share.

Molina Healthcare Inc. MOH reported first-quarter 2014 operating earnings of 10 cents per share, beating the Zacks Consensus Estimate of a break-even.

Tenet Healthcare Corp. THC reported first-quarter 2014 operating loss of 12 cents that was narrower than the Zacks Consensus Estimate loss of 15 cents per share.
 

Zacks Rank

Gentiva carries a Zacks Rank #4 (Sell).

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