Health Management Associates (HMA) reported second quarter 2010 earnings per share of 16 cents, beating the Zacks Consensus Estimate of 15 cents, as well as the year-ago result of 13 cents.
Health Management’s total revenue grew 10% year-over-year to $1,247.8 million. Net sales from continuing operations, on a consolidated basis, increased 10.3% on a year-over-year basis.
Operational Statistics
On a continuing operations basis, Health Management’s, occupancy dipped to 43.8% in the reported quarter compared with 45.1% a year ago. Patient days inched up 3.7% year over year. Admissions went up 5% while adjusted admissions grew 9.6%. Average length of stay was stagnant at 4.2 days, Surgeries soared 10.1%, and Emergency Room visits gained 3.6%.
For continuing operations at hospitals, which are both owned and operated by Health Management, adjusted EBITDA, went up 6.5% to $210.0 million. EBITDA margin was 17.8% in the second quarter compared with 17.4% a year-ago.
Bad debt expense was down slightly to 12.0% from 12.1% in the prior-year period. The total of discounts for uninsured patients, write-offs for charity and bad debt expense, as a percentage of the sum of net sales, uninsured discounts and charity write-offs, was higher at 24.8% in the quarter, compared with 24.4% a year-ago.
Balance Sheet
Cash and cash equivalents were $113 million at the end of the quarter, up 6.6%. Long-term debt was stagnant at about $3.0 billion.
Outlook
Health Management reiterated its guidance for earnings per share in the range of 56 cents to 61 cents for 2010.
We believe that Health Management is benefiting from a gradual growth in admissions largely due to improvements in Emergency Room and sustained physician recruitment. Combined with the current low inflation environment for the hospital industry, we believe Health Management will continue to expand margins from continuing operations and drive above-industry average EPS growth.
Read the full analyst report on “HMA”
Zacks Investment Research
