DVA - DaVita lowers guidance as COVID-19 and labor headwinds impact Q3
Dialysis services provider DaVita ( NYSE: DVA ) fell short of Street forecasts with its Q3 2022 financials on Friday amid worse-than-expected COVID-driven volume trends and unfavorable labor market conditions.
"Like others in the healthcare community, negative volume trends due to COVID and continued labor pressure impacted our financial performance more than expected," Chief Executive Javier Rodriguez remarked ahead of the earnings call at 8:30 a.m.
Revenue for the period remained flat from the prior year at $2.9B as U.S. dialysis stagnated at an average of ~92.9K treatments per day.
Meanwhile, revenue per treatment grew ~1% sequentially amid ~4% growth in per-treatment patient care costs, mainly driven by increases in labor expenses, medical supply costs, and other direct costs related to dialysis centers.
The operating income for the period fell ~34% YoY to $311.8M, and net income crashed ~59% YoY to $105.4M as the company incurred higher than expected costs for center capacity closures following a strategic review of outpatient clinic capacity.
DaVita ( DVA ) has lowered its full-year outlook for adjusted operating income and adjusted diluted net income per share to $1.375B – $1.450 and $6.20 - $6.70 compared to $1.57B and $7.77 per share in the consensus, respectively.
The company's shares mostly move in tandem with those of its German rival Fresenius Medical Care ( FMS ), which slashed its full-year guidance in July, citing the tightening U.S. labor market and inflation.
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DaVita lowers guidance as COVID-19 and labor headwinds impact Q3