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DaVita (DVA) Earnings and Revenues Beat Estimates in Q1

DaVita DVA reported first-quarter 2020 adjusted earnings per share (EPS) of $1.83, beating the Zacks Consensus Estimate of $1.46 by 25.3%. The bottom line also reflects significant improvement from the year-ago quarter’s 91 cents.

Total revenues in the quarter rose 3.6% year over year to $2.84 billion, outpacing the Zacks Consensus Estimate by 0.2%.

Segment Details

Net dialysis and related lab patient service revenues in the first quarter totaled $2.71 billion, up 3.4% on a year-over-year basis. Other revenues were $127.9 million, up 12.8% from the year-ago quarter’s figure.

Per management, total U.S. dialysis treatments for the first quarter were 7,513,321, or an average 96,821 treatments per day. This represents a per-day increase of 1.6% on a year-over-year basis.

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Also, the company provided dialysis services to a total of approximately 238,000 patients at 3,054 outpatient dialysis centers, of which 2,772 centers were located in the United States and 282 centers in 10 other countries.

During the quarter, DaVita opened a total of 22 new dialysis centers and acquired two in the country. Outside the United States, the company launched three new dialysis centers and acquired 22. However, the company has closed a few dialysis centers, both within and outside the United States.

DaVita Inc. Price, Consensus and EPS Surprise

 

DaVita Inc. Price, Consensus and EPS Surprise
DaVita Inc. Price, Consensus and EPS Surprise

 

 

DaVita Inc. price-consensus-eps-surprise-chart | DaVita Inc. Quote

Financial Condition

DaVita exited the first quarter with operating cash flow (from continuing operations) of $360 million, compared with $73 million in the year-ago quarter. Free cash flow from continuing operations came at $184 million.

Guidance

DaVita has reaffirmed the 2020 revenue range between $11.50 billion and $11.70 billion. The Zacks Consensus Estimate for the same is pegged at $11.62 billion.

Adjusted EPS is also reaffirmed between $5.75 and $6.25. The Zacks Consensus Estimate for the same stands at $6.04.

Operating income margin guidance has been reaffirmed at the band of 13-14%.

Free cash flow from continuing operations is reaffirmed between $600 million and $800 million.

Our Take

DaVita ended the first quarter on a strong note. The significant improvement in the bottom line is encouraging. Dialysis services in the United States showcased solid results during the quarter. Also, dialysis activities ramped up overseas. The acquisition of several dialysis centers overseas is encouraging. Increase in operating income during the quarter raises optimism. A solid guidance for 2020 is another positive. However, foreign exchange headwinds and stiff competition continue to weigh on the company.

Zacks Rank and Key Picks

DaVita currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Aphria Inc. APHA, Biogen Inc. BIIB and Eli Lilly and Company LLY. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aphria reported third-quarter fiscal 2020 adjusted EPS of 2 cents, comparing favorably with the Zacks Consensus Estimate of a loss of 4 cents. Net revenues of $64.4 million outpaced the consensus estimate by 14.6%. The company carries a Zacks Rank #2 (Buy) at present.

Biogen currently carries a Zacks Rank #2. It reported first-quarter 2020 adjusted EPS of $9.14, surpassing the Zacks Consensus Estimate by 18.1%. Revenues of $3.53 billion outpaced the consensus mark by 3.2%.

Eli Lilly delivered first-quarter 2020 EPS of $1.75, outpacing the Zacks Consensus Estimate by 12.9%. Revenues of $145.3 million surpassed the consensus estimate by 6.3%. The company currently sports a Zacks Rank #1.

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