Seniors Housing Weekly Update - Fourth Quarter Earnings Arrive

February 11, 2014

 
February 11, 2014. 60 Seconds with Steve Monroe. So far, a mixed bag, with Skilled Healthcare Group not so good, and Brookdale Senior Living much better.

Fourth Quarter Earnings Arrive

There was a story this week about how even if a company meets earnings estimates, or even beats them, investors may slam the stock if they don’t like what they see. With fourth quarter earnings arriving, we are really getting a mixed bag. Take Skilled Healthcare Group, and while it may be tough to slam it any further, the fourth quarter did not help with its valuation. It missed earnings estimates, patient days dropped, occupancy dipped, Medicare patient mix declined, home health and hospice revenues decreased and as did episodic admissions, rehab revenue deteriorated….well, you get the picture. The new management gave no guidance for 2014, other than EBITDA would be higher. Well, they are just going to have to prove it aren’t they, but their forecasts last year never held up, so why should investors believe them now? They didn’t and sent the shares down 8% to a new 52-week low. On the flip side, Brookdale Senior Living reported decent fourth quarter results, with cash flow from operations higher than estimates despite modest increases in occupancy. And how did this happen? Margins were up a bit and CCRC entrance fee receipts jumped. Hmmm, I guess the CCRC market really is coming back. 

 

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