Oppenheimer Reiterates "Perform" Rating for LifePoint Hospitals, Inc.

Oppenheimer published a report earlier today discussing the quarterly results for LifePoint Hospitals, Inc. LPNT. LPNT reported Q42010 EPS of $0.70, which beat Oppenheimer's and the Street's consensus estimate of $0.67. This was driven by a lower tax rate and revenue growth of 14.2% yoy. However, operating expenses also increased by 21.7% yoy. As a result, Oppenheimer is readjusting its EPS targets for 2011 and 2012 to $3.04 and $3.32 from $3.30, respectively. In the report, LPNT reported revenues of $853.3M, which was primarily driven by volume growth from Sumner. Adjusted EBITDA, however, was down 140 bps yoy due to recent acquisitions, including Sumner. Other factors included other operating expense, which was 100 bps above estimate, and bad debt expense of 14.1%. Additionally, LPNT reported strong operating cash flows at $94M and invested half of that in capital expenditures. Oppenheimer believes that this strong cash flows allows LPNT to be active in acquisitions if the opportunity presents itself. LPNT provided FY2011 EPS guidance of $2.80 to $3.10 per diluted share, which does not take into account acquisitions upsides. Oppenheimer believes that the Q4 results were better than expected and that they really like the hospital space. However, they note that LPNT's results have been quite volatile recently and reiterates their “Perform” rating for LPNT. LPNT is currently trading at $36.11.