HMS Holdings Earnings: Here’s Why the Stock is Up Now

HMS Holdings Corp. (NASDAQ:HMSY) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 0.39%.

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

HMS Holdings Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 6.25% to $0.15 in the quarter versus EPS of $0.16 in the year-earlier quarter.

Revenue: Rose 8.66% to $116.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: HMS Holdings Corp. reported adjusted EPS income of $0.15 per share. By that measure, the company missed the mean analyst estimate of $0.18. It missed the average revenue estimate of $123.83 million.

Quoting Management: “As we anticipated, our Medicaid coordination of benefits business improved in the first quarter of the year,” remarked Bill Lucia, Chief Executive Officer of HMS. “We remain confident in our opportunities for expanded business within the healthcare reform environment, particularly as it relates to Medicaid program growth in 2014 and beyond. At the same time, we face a number of near-term uncertainties, the most significant of which relate to the extended delay in the Medicare Coordination of Benefits award resolution and the reprocurement of the Medicare RAC contract, together with potential changes to that contract’s structure. While either of these federal procurements may resolve in our favor, we do not have clarity around the timing or outcome of the resolutions. The financial impact on HMS of these two large procurements will ultimately be determined by CMS timelines and contract transition strategy and may have the effect of shifting any associated revenues partly or wholly out of 2013,” Lucia said.

Key Stats (on next page)…

Revenue decreased 12.4% from $133.1 million in the previous quarter. EPS decreased 44.44% from $0.27 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 $0.24 to a profit $0.22. For the current year, the average estimate has moved down from a profit of $0.98 to a profit of $0.97 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