Ahead of the Bell: DaVita HealthCare shares climb

Shares of DaVita HealthCare Partners Inc. jumped in premarket trading Wednesday, a day after the kidney dialysis provider said it reached an agreement to resolve a government investigation and reported fourth-quarter results that soared 36 percent and topped analyst expectations.

The Denver company said Tuesday it agreed to a settlement for a federal investigation into its physician relationships. The deal will be finalized in the coming months, and DaVita expects it to include a previously announced payment of about $389 million and a corporate integrity agreement. The company also will unwind some joint ventures it created with nephrologists, who specialize in kidney care.

Citi analyst Gary Taylor said in a research note that even though DaVita topped expectations in the quarter, this resolution may be most important for investors. He said DaVita still expects to use joint ventures in the future through a structure the government finds acceptable.

DaVita earned $212.3 million, or 99 cents per share, in the quarter that ended Dec. 31. Total revenue jumped 24 percent to $3.06 billion.

Analysts expected, on average, earnings of 98 cents per share on $3.04 billion in revenue, according to FactSet.

William Blair analyst Margaret Kaczor said in another research note that she sees a number of catalysts for the stock in 2014, including acquisitions and growth opportunities through patients who are eligible for both the government's Medicare Advantage and Medicaid programs.

DaVita shares rose 5.9 percent, or $3.80, to $68.13 about an hour and a half before markets opened Wednesday.