HMA Previews 4Q, Guides FY11 - Analyst Blog

Health Management Associates (HMA), a leading operator of general acute care hospitals, has announced its expected results for fourth quarter 2010 and outlook for fiscal 2011. The company expects to post net revenues and earnings (from continuing operations) of roughly $1.35 billion and 15-16 cents, respectively, in the quarter.

For fiscal 2010, Health Management projects adjusted (excluding specific gains) earnings between 64 cents and 65 cents per share on sales of $5.11 billion. The expectations are mostly in line with the current Zacks Consensus Estimates for revenues and earnings of $5.14 billion and 65 cents per share, respectively.  

The company stated that on a continuing operations basis, surgeries rose 5.2% year over year during the fourth quarter, while admissions declined 3% (flat on an adjusted basis).

Moving forward, Health Management expects earnings from continuing operations of 72-76 cents per share and revenues of $5.7-$5.9 billion for fiscal 2011. The company expects admissions to grow 0-2% during the year. The current Zacks Consensus Estimates for revenues and earnings for 2011 are $5.57 billion and 73 cents, respectively.

Florida-based Health Management is engaged in the ownership and operation of general acute care hospitals and psychiatric hospitals in non-urban communities across the U.S. The company is an active acquirer of underperforming hospitals with a turnaround potential in high-growth markets. Health Management's competitors include Community Health Systems (CYH) and Lifepoint Hospitals (LPNT).

Health Management offers a vast range of services including general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services and psychiatric care. It also provides outpatient services and specialty services in cardiology. Health Management aims to deliver compassionate and high quality health care services to improve the quality of life of patients, physicians and the communities it serves.

Health Management remains committed to expanding its business through strategic acquisitions. In July 2010, it acquired a 60% interest in three hospitals of Shands HealthCare (“Shands”), a health care network in North Central Florida, for roughly $21.5 million.

The acquisition has enabled the company to improve the quality of care, expand necessary services and broaden the access for the residents of the Bradford, Columbia and Suwannee counties in Florida. Moreover, the company acquired health care services provider Wuesthoff Health System for roughly $152 million in October 2010. To boost growth, Health Management continues to evaluate additional acquisition opportunities.

 
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