AdaptHealth Cuts Outlook Amid Divestment and Unexpected Price Hikes

Dow Jones
Aug 04
 

AdaptHealth shares fell after the company cut its full-year outlook, citing a divestment and manufacturer price increases.

The stock dropped 26% to $7.98 in pre-market trading Tuesday. Through the previous close, shares were up 12% this year.

The home medical-equipment provider now projects revenue to be $2.85 billion to $2.89 billion for the year, down from an earlier estimate of $3.45 billion to $3.52 billion.

AdaptHealth said it has experienced an unexpected price increase from one of its manufacturers during the second quarter. It is also divesting its diabetes health business, which the company said is impacting margins.

Those elements led management to lower its full-year outlook, Chief Executive Suzanne Foster said.

"We are moving quickly to address the cost pressures introduced by our rapid growth, and we believe these actions will make us a stronger, more efficient company," Foster said.

The new outlook includes a $100 million ding from the diabetes health divestment, as well as an impact of $30 million from the manufacturer price increase.

AdaptHealth swung to an unexpected loss of $133.9 million, or 99 cents a share, in the second quarter, from a profit of $14.7 million, or 10 cents a share, the year before. Analysts were expecting a profit of 15 cents a share.

The loss was largely the result of a $144.2 million pre-tax writedown of goodwill, AdaptHealth said.

Revenue rose 13% to $740.3 million, missing Wall Street's estimate of $846.8 million.

 
 

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