DVA - DaVita up ~6% after hours on quarterly results beat raised profit guidance

2023-11-07 18:46:37 ET

DaVita ( NYSE: DVA ) stock on Tuesday rose as much as 6.1% to $85 in extended trading, after the dialysis services provider delivered a quarterly top and bottom line beat despite seeing a fall in hospital inpatient revenues.

Denver, Colo.-based DVA is one of the leading players in the U.S. dialysis market, which according to Global Market Insights was valued at more than $42B in 2022 and is projected to swell at a nearly 4% compound annual growth rate from 2023 to 2032.

DaVita ( DVA ) reported Q3 adjusted earnings per share of $2.85, which beat estimates by a solid 81 cents. Revenue rose nearly 6% Y/Y to $3.12B, also beating expectations by $100M.

Moreover, DVA raised its full year guidance for adjusted operating income, adjusted earnings per share and free cash flow. The company now sees adjusted EPS of $7.80 to $8.30, compared to a prior range of $7.00 to $7.80. The consensus estimate is $7.52.

DaVita's ( DVA ) results come amid investor concerns over the impact of Novo Nordisk's ( NVO ) semaglutide on dialysis companies, nearly a month after the Danish drugmaker stopped a trial of the drug earlier than expected in kidney failure due to the interim data showing efficacy.

Dialysis services providers, including DVA, had seen a bout of heavy selling after NVO's announcement. DVA chief medical officer Jeff Giullian had addressed Novo's ( NVO ) news, saying that there "may be limited application" of the study's findings to the overall chronic kidney disease patient population.

DaVita's ( DVA ) Q3 report showed revenue from dialysis patient services rose 3.5% Y/Y to $2.95B. Meanwhile, total U.S. dialysis treatments in Q3 were about 7.31M, or an average of ~92.5K treatments per day, representing a per day decrease of 0.2% compared to Q2 2023. Revenue per treatment rose $3.60 from Q2 to $380.33.

"Our U.S. dialysis average patient service revenue per treatment was negatively impacted by a decrease in hospital inpatient revenues," DaVita ( DVA ) said in a statement .

DVA in Q3 opened a total of five new dialysis centers and closed 15 dialysis centers in the U.S. As of September 30, the company provided dialysis services to a total of around 249.1K patients at more than 3K outpatient centers.

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• DaVita: Continued Economic Hurdles, Market Expectations May Be Correct
• Dialysis stocks decline again as Novo Nordisk hits 52-week high
• Seeking Alpha's Quant Rating on DaVita

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