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DaVita (NYSE:DVA) shares plummeted over 27% Friday after the company reported earnings before the open missing profit, revenue and guidance estimates.
DaVita reported third-quarter earnings of $1.45 per share, $0.30 worse than the analyst estimate of $1.75, with revenue for the quarter coming in at $2.95 billion versus the consensus estimate of $2.98 billion.
The company described Q3 as a “challenging” quarter with negative volume trends as a result of Covid and continued labor pressure impacting its financial performance more than expected.
The company’s operating income was $312 million while operating cash flow and free cash flow were $711 million and $500 million, respectively.
“I’m incredibly proud of the execution of our teams in a challenging operating environment and the unwavering focus of our frontline teammates on patient care,” said DaVita CEO Javier Rodriguez. ” I remain confident in our business and ability to leverage our end-to-end kidney care platform as a differentiated asset.”
DaVita also lowered guidance, missing analyst consensus estimates once again. It sees FY2022 earnings per share between $6.20 and $6.70, compared to prior guidance of $7.50-$8.50 and the consensus of $7.72.
Following the earnings release, Cowen analysts told investors in a note that “excluding presumably non-recurring/non-operational clinic closure costs, DVA only missed 3Q22 consensus OI by 6%, but 4Q22 stub OI guidance is 32% below consensus and the 2023 OI bridge is lowered for the third time such that 2023G OI is nearly 20% ($353m) below consensus.”
The analysts have a Market Perform rating and a $95 per share price target on DaVita shares.
