Health Management Associates Inc. Earnings: Snaps Strong Streak with Profit Drop

Health Management Associates Inc. (NYSE:HMA) reported its results for the first quarter. Health Management Associates and its subsidiaries provide health care services to patients in owned and leased facilities located mainly in non-urban communities in the southeastern and southwestern United States.

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Health Management Associates Earnings Cheat Sheet for the First Quarter

Results: Net income for Health Management Associates Inc. fell to $37.7 million (15 cents per share) vs. $55.5 million (22 cents per share) a year earlier. This is a decline of 32.1% from the year-earlier quarter.

Revenue: Rose 3.6% to $1.49 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Health Management Associates Inc. fell short of the mean analyst estimate of 22 cents per share. It fell short of the average revenue estimate of $1.64 billion.

Quoting Management: “Health Management had another great quarter and a great start to 2012, with revenue up 18.4% year over year,” said Gary D. Newsome, Health Management’s President and Chief Executive Officer. “Our operating strategy continued to generate strong results in the first quarter as we managed our resources relative to the volume and acuity of our patients. We believe that there are further improvement opportunities in our hospitals as we continue to affect change in our processes and systems in emergency room operations, physician recruitment and market service development. In addition, our partnership development pipeline continues to be extremely active.”

Key Stats:

Last quarter’s profit decreases breaks a four-quarter run of profit increases. In the fourth quarter of the last fiscal year, net income rose 9.5% from the year earlier, while the figure increased 23.9% in the third quarter of the last fiscal year, 22.6% in the second quarter of the last fiscal year and 18.3% in the first quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 20.6% to $1.58 billion in the fourth quarter of the last fiscal year. The figure rose 10.2% in the third quarter of the last fiscal year from the year earlier and climbed 11.8% in the second quarter of the last fiscal year from the year-ago quarter.

After beating analyst estimates for the two previous quarters, the company fell short of forecasts. In the fourth quarter of the last fiscal year, it topped the mark by 6 cents, and in the third quarter of the last fiscal year, it was ahead by 2 cents.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the second quarter has moved up from 19 cents a share to 20 cents over the last ninety days. The average estimate for the fiscal year is 86 cents per share, a rise from 83 cents ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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