Skilled Healthcare Group Earnings: Here’s Why Investors are Bidding Down Shares Now

Skilled Healthcare Group, Inc. (NYSE:SKH) 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 down 1.84%.

Skilled Healthcare Group, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 23.81% to $0.16 in the quarter versus EPS of $0.19 in the year-earlier quarter.

Revenue: Rose 2.23% to $219.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Skilled Healthcare Group, Inc. reported adjusted EPS income of $0.16 per share. By that measure, the company missed the mean analyst estimate of $0.19. It missed the average revenue estimate of $219.67 million.

Quoting Management: “Our strong cash flows from operating activities of $43 million for the 2012 year enabled us to reduce our debt by $26.5 million to $449.0 million as of December 31, 2012, in spite of the significant challenges associated with the extraordinary Medicare rate cut and anti-efficiency program changes that discourage group and concurrent therapy, which took effect in the fourth quarter of 2011 for our skilled nursing businesses, followed by the initiation of a new Manual Medical Review by CMS for therapy services under Medicare Part B,” said Boyd Hendrickson, Chairman and Chief Executive Officer of Skilled Healthcare Group.

Key Stats (on next page)…

Revenue increased 1.19% from $216.62 million in the previous quarter. EPS decreased 23.81% from $0.21 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.17 to a profit $0.18. For the current year, the average estimate has moved down from a profit of $0.76 to a profit of $0.75 over the last ninety days.

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