Healthways Earnings: Here’s Why the Shares are Down Now

Healthways Inc. (NASDAQ:HWAY) had a loss 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 1.09%.

Markets are at 5-year highs! Discover the best stocks to own. Click here for our fresh Feature Stock Pick now!

Healthways Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-0.12 in the quarter versus EPS of $-0.08 in the year-earlier quarter.

Revenue: Decreased 0.01% to $165.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Healthways Inc. reported adjusted EPS loss of $0.12 per share. By that measure, the company beat the mean analyst estimate of $-0.15. It beat the average revenue estimate of $162.81 million.

Quoting Management: “Healthways’ first-quarter 2013 financial performance was consistent with our expectations, supporting the previously discussed quarterly progression that we expect will enable us to achieve our financial guidance for 2013,” said Ben R. Leedle, Jr., president and chief executive officer of Healthways, Inc. “As anticipated, our revenues for the quarter reflected the negative impact from the termination of the Cigna contract and one other health plan contract (the “two terminated contracts”). Excluding the two terminated contracts, our revenues expanded more than $18 million, or 12.6%, compared to the same quarter last year (see page 7 for a reconciliation of non-GAAP financial measures). Despite the impact from the two terminated contracts, we expect the large, long-term contracts we signed in 2012 to drive sequential-quarter growth in revenues and margins for the remainder of 2013. As a result, we affirm our financial guidance for 2013. We also remain confident that the continued organic growth and ramping revenue of our current contract base will produce profitable growth for 2014.

Key Stats (on next page)…

Revenue decreased 0.82% from $166.56 million in the previous quarter. EPS decreased to $-0.12 in the quarter versus EPS of $0.05 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.05 to a profit $0.02. For the current year, the average estimate has moved down from a profit of $0.35 to a profit of $0.28 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

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

More Articles About:   , ,  

More from The Cheat Sheet