Alliance HealthCare Systems Shares Rise Following Earnings

Alliance HealthCare AIQ reported 3Q10 EBITDA of $40.4 million vs. Wells Fargo's estimate of $44.1 million. The company reaffirmed 2010 EBITDA guidance of $155-180 million but lowered radiation therapy center openings to 2 from 5-8. Wells Fargo is reducing its 2010 and 2011 EBITDA estimates to $162.1 million from $166.9 and to $175.2 million from $179.3 million, respectively, to reflect the slowdown in its radiation oncology segment; EPS estimates are $-0.10 and $0.06 down from , $-0.08 and $0.10, respectively. On Monday, AIQ's largest shareholder Oaktree Holdings announced that it has increased its holdings above 50.0% to 50.8%. The execution of its primary growth strategy in radiation oncology has been slower than expected. Management pointed to the deliberate pace of the decision cycle causing delay. Up to this point, the company has targeted acquiring larger radiation oncology providers. Alliance suggested it could become more aggressive in its strategy including expanding its sales efforts and looking more at single-center stereotactic radio surgery providers. The company has over $100 million of cash. Wells Fargo includes 4 new radiation therapy centers in 2011 and $50 million of segment revenue; previous estimate was $60 million. AIQ is trading almost 3% higher at $4.36