Skilled Healthcare Group Misses Where it Counts

Seth Jayson, The Motley Fool
Updated

Skilled Healthcare Group (NYS: SKH) reported earnings May 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Skilled Healthcare Group beat slightly on revenues and missed estimates on earnings per share.

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


Margins contracted across the board.

Revenue details
Skilled Healthcare Group tallied revenue of $219.4 million. The 10 analysts polled by S&P Capital IQ wanted to see sales of $215.1 million on the same basis. GAAP reported sales were 1.4% lower than the prior-year quarter's $222.6 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
EPS came in at $0.17. The 12 earnings estimates compiled by S&P Capital IQ averaged $0.19 per share. GAAP EPS of $0.17 for Q1 were 47% lower than the prior-year quarter's $0.32 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 14.5%, 460 basis points worse than the prior-year quarter. Operating margin was 8.8%, 450 basis points worse than the prior-year quarter. Net margin was 2.9%, 240 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $216.4 million. On the bottom line, the average EPS estimate is $0.20.

Next year's average estimate for revenue is $874.1 million. The average EPS estimate is $0.83.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 132 members out of 142 rating the stock outperform, and 10 members rating it underperform. Among 34 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 32 give Skilled Healthcare Group a green thumbs-up, and two give 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 $7.10.

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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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