Will Q3 Earnings Hold A Surprise For Davita (DVA) Stock?
Zacks Investment Research | Oct 30, 2016 11:03PM ET
DaVita HealthCare Partners Inc. (NYSE:DVA) is set to report third-quarter 2016 results after the market closes on Nov 2. Last quarter, the company posted a positive earnings surprise of 3.06%. Let’s see how things are shaping up for this announcement.
.
Factors to be Considered this Quarter
Davita’s Kidney Care is expected to have performed well in the third quarter due to its continuous investments in capital-efficient technologies. Launch of seven new de novo clinics, which is a clear instance of this, is likely to have significantly boosted the top line of this segment.
Growth in Kidney Care is also likely have been supported by two new legislations, namely Dialysis PATIENT Demonstration Act and ESRD Choice Act. Both these acts are expected to have bolstered Davita’s long-term strategy of integrated care.
The joint venture with Khazanah and Mitsui Khazanah might have further driven growth of Davita’s Kidney Care business. However, the company plans to deconsolidate these two in the future in order to record a material non-cash one-time gain.
The expansion of Affordable Care Act (ACA) is expected to have boosted Davita’s revenues through increased market share.
Continuously weighing capital deployment opportunities across growth investment, share repurchases, debt repayment and holding cash likely have driven the company’s operating margin by limiting the share count.
Operating cash flow is expected to have remained strong in the quarter due to improved performance of the Kidney Care business and the capitated care business.
However, management believes that Davita’s the inability to meet the target of fee-for-service revenue growth and the costs expected to be incurred due to the rebranding from HealthCare Partners to the DaVita Medical Group might result in its underperformance in the quarter.
Also, an overestimation of expected reconciliation payments for Medicare Advantage revenues is might result in the company missing estimates in the to-be-reported quarter.
In addition, interest expenses are expected to remain elevated owing to higher level of debt-tapering margins.
The company’s share price has been fluctuating over the last few days. We wait to see how the stock reacts to the quarterly results.
DAVITA INC Price and EPS Surprise
Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.