PSS World Medical Earnings: Snaps Strong Streak with Profit Drop
PSS World Medical Inc. (NASDAQ:PSSI) reported its results for the fourth quarter. PSS World Medical is a national distributor of medical products and equipment, pharmaceutical products, healthcare information technology, and billing services to alternate-site healthcare providers.
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PSS World Medical Earnings Cheat Sheet for the Fourth Quarter
Results: Net income for PSS World Medical Inc. fell to $20 million (38 cents per share) vs. $21.6 million (38 cents per share) a year earlier. This is a decline of 7.5% from the year-earlier quarter.
Revenue: Fell 2% to $538.9 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: PSS World Medical Inc. fell short of the mean analyst estimate of 43 cents per share. It fell short of the average revenue estimate of $556 million.
Quoting Management: President and Chief Executive Officer, Gary A. Corless, commented, “We are on the front lines of healthcare serving caregivers who are dealing with the rapidly changing environment of lower utilization, consolidation and decreasing reimbursement rates. These headwinds created challenges during the past year which impacted our financial performance. While we were able to generate reasonable annual growth in fiscal year 2012 of 3.3% in revenues and 4.5% in EPS, we have not been satisfied with our performance and results. We intend to match the rapid rate of external change with a proactive transformation of our organization, designed to maximize the strength of our caregivers, the performance of our people, and the returns for all those invested in us and our purpose. Our announcement today of this transformation plan, which includes our intent to divest our skilled nursing business and a smaller, specialty dental business, will realign our efforts and investments to those areas identified as critical to the future of U.S. healthcare and best aligned with our competencies.”
Last quarter’s profit decrease ends a four-quarter streak of profit increases. In the third quarter, net income rose 3% from the year earlier, while the figure increased 2.4% in the second quarter, 3.2% in the first quarter and 31.4% in the fourth quarter of the last fiscal year.
A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the fourth quarter of the last fiscal year, which saw revenue rise 10.6%.
The company has fallen short of estimates for two consecutive quarters. In the third quarter, it missed expectations by one cent with net income of 38 cents versus a mean estimate of net income of 39 cents per share.
Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the first quarter of the next fiscal year is 31 cents per share, down from 32 cents ninety days ago. The average estimate hasn’t changed from $1.43 per share for the fiscal year.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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