HEALTHSOUTH Earnings: Here’s Why Investors are Not Happy Now

HEALTHSOUTH Corp. (NYSE:HLS) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 0.9%.

HEALTHSOUTH Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 30.77% to $0.51 in the quarter versus EPS of $0.39 in the year-earlier quarter.

Revenue: Rose 7.14% to $564.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: HEALTHSOUTH Corp. reported adjusted EPS income of $0.51 per share. By that measure, the company beat the mean analyst estimate of $0.42. It beat the average revenue estimate of $554.08 million.

Quoting Management: “We are very pleased with the results of the second quarter,” said Jay Grinney, President and Chief Executive Officer of HealthSouth. “Net operating revenues grew 5.8% quarter over quarter on strong demand for our services while disciplined expense management resulted in a 7.5% increase in Adjusted EBITDA despite sequestration headwinds. We also continued to grow our portfolio of industry-leading hospitals with the opening of new hospitals in Littleton, Colorado and Stuart, Florida; the latter is a joint venture with Martin Health System. Importantly, our board of directors approved the initiation of a quarterly cash dividend. This action underscores our confidence in the sustainability of our business model and growth agenda while rewarding existing shareholders and providing an incentive for new shareholders to own our stock.”

Key Stats (on next page)…

Revenue decreased 0.12% from $565.2 million in the previous quarter. EPS increased 6.25% from $0.48 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.40 and has not changed. For the current year, the average estimate has moved up from a profit of $1.69 to a profit of $1.73 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)