Skilled Healthcare Group Beats on EPS But GAAP Results Lag

Seth Jayson, The Motley Fool
Updated

Skilled Healthcare Group (NYS: SKH) reported earnings on Feb. 13. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Skilled Healthcare Group met expectations on revenues and beat expectations on earnings per share.

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

Margins shrank across the board.

Revenue details
Skilled Healthcare Group chalked up revenue of $217.2 million. The 11 analysts polled by S&P Capital IQ expected revenue of $218.1 million on the same basis. GAAP reported sales were 2.9% lower than the prior-year quarter's $220.7 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.32. The 13 earnings estimates compiled by S&P Capital IQ averaged $0.31 per share on the same basis. GAAP EPS of $0.19 for Q3 were 34% lower than the prior-year quarter's $0.29 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 15.2%, 340 basis points worse than the prior-year quarter. Operating margin was 9.4%, 290 basis points worse than the prior-year quarter. Net margin was 3.2%, 170 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $212.5 million. On the bottom line, the average EPS estimate is $0.15.

Next year's average estimate for revenue is $867.8 million. The average EPS estimate is $1.10.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 140 members out of 149 rating the stock outperform, and nine members rating it underperform. Among 42 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 41 give Skilled Healthcare Group a green thumbs-up, and one gives it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Skilled Healthcare Group is hold, with an average price target of $6.49.

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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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