Health Management Associates Third Quarter Earnings Sneak Peek

Health Management Associates, Inc. (NYSE:HMA) will unveil its latest earnings on Monday, October 22, 2012. 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.

Health Management Associates, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 19 cents per share, no change from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. Analysts are projecting profit to rise by 1.2% compared to last year’s 85 cents.

Past Earnings Performance: The company met estimates last quarter after beating the forecasts in the prior two. In the second quarter, the company reported profit of 21 cents per share versus a mean estimate of net income of 21 cents per share. In the first quarter, the company beat estimates by 2 cents.

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A Look Back: In the second quarter, profit fell 24% to $37 million (14 cents a share) from $48.6 million (19 cents a share) the year earlier, meeting analyst expectations. Revenue rose 5.5% to $1.47 billion from $1.4 billion.

Wall St. Revenue Expectations: Analysts are projecting a rise of 17.1% in revenue from the year-earlier quarter to $1.64 billion.

Stock Price Performance: Between September 18, 2012 and October 16, 2012, the stock price dropped 91 cents (-10.6%), from $8.56 to $7.65. The stock price saw one of its best stretches over the last year between January 17, 2012 and January 25, 2012, when shares rose for seven straight days, increasing 15.7% (+91 cents) over that span. It saw one of its worst periods between November 11, 2011 and November 25, 2011 when shares fell for 10 straight days, dropping 18.4% (-$1.68) over that span.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 10.2% in the third quarter of the last fiscal year, 20.6% in the fourth quarter of the last fiscal year and 3.6% in the first quarter before increasing again in the second quarter.

After experiencing income drops the past two quarters, the company is hoping to use this earnings announcement to rebound. Net income dropped 32.1% in the first quarter and then again in the second quarter.

Analyst Ratings: With nine analysts rating the stock as a buy, none rating it as a sell and nine rating it as a hold, there are indications of a bullish outlook.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.59 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.68 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 5.9% to $847.9 million while assets rose 0.6% to $1.35 billion.

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

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