Shares of health care services company Pediatrix Medical Group Inc. continued sliding Thursday on fallout from its move to cut third-quarter profit guidance because of lower reimbursements.
Shares fell $2.09, or 4.4 percent, to $45.56. On Wednesday, the stock slid 11.6 percent to close at $47.65.
On Wednesday, Fort Lauderdale, Fla.-based Pediatrix said a shift in reimbursement for patient care from commercial payers to government payers will affect revenue, along with a decline in patient volume.
The company, which provides clinical care for babies born prematurely and expectant mothers and anesthesia care services, said it now expects third-quarter profit between 81 cents and 83 cents per share, down from prior guidance of 84 cents to 87 cents per share, set in August. Also, Pediatrix said it can no longer confirm guidance for profit between 84 cents and 87 cents per share for the fourth quarter.
Citi analyst Gary Taylor reaffirmed a "Buy" rating, but cut his price target to $55 from $66 while revising his 2009 profit outlook because of the reimbursement shift. The trend from commercial payers to less lucrative government payers will likely continue, he said. Commercial payers reimburse at three times the average Medicaid rate, he said.
"We believe this mix shift will continue as long as unemployment is rising," he said in a note to investors.
He now expects 2009 profit of $3.40 per share instead of $3.65 per share because of the reimbursement shift.
Meanwhile, Morgan Keegan & Co. analyst Robert M. Mains lowered his rating on Pediatrix to "Market Perform" from "Outperform," citing the cut guidance.
Shares fell $2.09, or 4.4 percent, to $45.56. On Wednesday, the stock slid 11.6 percent to close at $47.65.
On Wednesday, Fort Lauderdale, Fla.-based Pediatrix said a shift in reimbursement for patient care from commercial payers to government payers will affect revenue, along with a decline in patient volume.
The company, which provides clinical care for babies born prematurely and expectant mothers and anesthesia care services, said it now expects third-quarter profit between 81 cents and 83 cents per share, down from prior guidance of 84 cents to 87 cents per share, set in August. Also, Pediatrix said it can no longer confirm guidance for profit between 84 cents and 87 cents per share for the fourth quarter.
Citi analyst Gary Taylor reaffirmed a "Buy" rating, but cut his price target to $55 from $66 while revising his 2009 profit outlook because of the reimbursement shift. The trend from commercial payers to less lucrative government payers will likely continue, he said. Commercial payers reimburse at three times the average Medicaid rate, he said.
"We believe this mix shift will continue as long as unemployment is rising," he said in a note to investors.
He now expects 2009 profit of $3.40 per share instead of $3.65 per share because of the reimbursement shift.
Meanwhile, Morgan Keegan & Co. analyst Robert M. Mains lowered his rating on Pediatrix to "Market Perform" from "Outperform," citing the cut guidance.
0 comments:
Post a Comment