DaVita Q1 earnings increase; top estimates - Update

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DaVita Q1 earnings increase; top estimates - Update
4/27/2009 11:48 PM ET

Monday, DaVita Inc. (DVA), a provider of dialysis services for patients suffering from kidney failure, reported an increase in earnings, which topped analysts' estimates as revenues advanced. The company also announced that from January 1, 2009 it adopted new accounting policy SFAS No.160.

Net income attributable to the company for the quarter increased to $96.2 million, from $86.9 million in the same period last year. Earnings per share rose to $0.92 from $0.80 per share in the corresponding period last year and exceeded the estimate of $0.91 per share projected by ten analysts polled by Thomson Reuters. Analysts' estimates typically exclude special items.

Revenues increased to $1.448 billion from $1.345 billion in the prior year quarter. Ten Street analysts expected the company to report revenues of $1.46 billion for the quarter.

Operating income increased to $221 million, from $206 million in the same period last year. Operating income margin declined to 15.2% from 15.3% in the year-earlier quarter.

As of March 31, 2009, the company operated or provided administrative services at 1,475 outpatient dialysis centers serving about 114 thousands patients. During the quarter, the company acquired seven centers, opened 18 new centers, merged one center and closed one center.

Total treatments were approximately 4.08 million, or 53,365 treatments per day, representing a per day increase of 5.0% over the same period last year. Non-acquired treatment growth rose 4.0% over the year-ago-quarter.

The company also announced that on January 1, 2009 it adopted SFAS No.160 noncontrolling interests in consolidated financial statements and implemented SEC Topic No.D-98 classification and Measurement of Redeemable securities.

DaVita said these standards changed the presentation and measurement of noncontrolling interests in financial statements, which primarily affected the presentation of operating income, operating cash flows and the effective income tax rate.

Looking ahead, the company said backed the operating income guidance attributable to DaVita Inc. for 2009 of $820-$880 million. However, as a result of adopting SFAS No. 160, operating income guidance is projected to be in the range of $870-$930 million, even though the underlying fundamental economics of the company have not changed. In addition, the company said operating cash flow guidance is now projected to be in the range of $550-$600 million compared with $500 million - $550 million projected earlier.

DVA rose $0.82 or 1.88% and closed Monday's regular trading session at $44.53. After-hours, DVA declined $0.03 or 0.07% and traded at $44.50.

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