Gentiva Health Services Beats Estimates but Has a Big Earnings Drop

Seth Jayson, The Motley Fool
Updated

Gentiva Health Services (NAS: GTIV) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Gentiva Health Services beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted and GAAP earnings per share dropped significantly.

Margins dropped across the board.

Revenue details
Gentiva Health Services tallied revenue of $449.2 million. The eight analysts polled by S&P Capital IQ expected to see a top line of $442.3 million. Sales were 3.4% lower than the prior-year quarter's $465.0 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.37. The nine earnings estimates compiled by S&P Capital IQ forecast $0.30 per share on the same basis. GAAP EPS of $0.15 for Q4 were 71% lower than the prior-year quarter's $0.51 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 46.4%, 350 basis points worse than the prior-year quarter. Operating margin was 5.6%, 670 basis points worse than the prior-year quarter. Net margin was 1.0%, 240 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $433.9 million. On the bottom line, the average EPS estimate is $0.24.

Next year's average estimate for revenue is $1.75 billion. The average EPS estimate is $1.06.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 309 members out of 324 rating the stock outperform, and 15 members rating it underperform. Among 114 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 110 give Gentiva Health Services a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Gentiva Health Services is hold, with an average price target of $4.70.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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