Morgan Keegan Comments On Alliance HealthCare Services Following Earnings
March 10, 2011 8:30 AM
Alliance HealthCare (NYSE: AIQ) reported fourth quarter earnings yesterday. Alliance remains adversely impacted by the weak economy and fewer physician office visits, resulting in fewer referrals for the company's MRI and PET/CT scans. Morgan Keegan expects volume pressures to abate as employment recovers, but does not project annual adjusted EBITDA growth until the second half of 2011.
Fixed site revenues were bolstered by the addition of seven new centers, radiation oncology revenues were flat sequentially despite adverse seasonality, and the MRI gap remains positive. Morgan Keegan made slight adjustments to its 2011 model, including the impact of weather in the first quarter. It is lowering the adjusted EBITDA estimate from $160 million to $155 million.
The Market Perform rating is mostly a reflection of the difficult operating environment of reduced demand for imaging services. Morgan Keegan has a $4 PT on AIQ
AIQ closed Wednesday at $4.18
