Group purchasing organization, Premier, Inc. ( NASDAQ: PINC ) lost ~7% pre-market Tuesday after the company lowered its fiscal 2023 guidance and announced staff reductions with its Q2 FY23 results.
“We are continuing to see lower levels of healthcare services utilization within our provider member base than we anticipated, which impacts the volume of supplies they purchase,” Chief Executive Michael Alkire remarked ahead of the earnings call at 8:00 a.m. ET.
Citing results for the first six months and macro concerns, Premier ( PINC ) trimmed its full-year earnings outlook to $2.53 – $2.65 in adjusted EPS compared to $2.63 – $2.75 in the previous guidance.
The company has raised the net revenue guidance for its Performance Services segment to $450M – $470M and trimmed the forecast for the Supply Chain Services segment to $930M – $950M while keeping the overall outlook for net revenue unchanged.
As part of a cost-saving plan implemented during Q3 FY23, Premier ( PINC ) is shedding ~4% of its staff, or nearly 100 jobs, and eliminating over 70 open positions to generate $18M - $20M of pre-tax cost savings in FY23.
The workforce reduction is expected to cost ~$8M of pre-tax cash restructuring charges in Q3 FY23.
As for Q2 FY23 financials, Premier ( PINC ) exceeded Street forecasts for both topline and bottom line even as net revenue contracted ~5% YoY to $359.6M and net income slumped ~17% YoY to $64.4M.
While the Performance Services segment grew ~15% YoY to add $124.1M in revenue, the Supply Chain Services segment, the main contributor to the top line, contracted ~13% YoY to bring $235.5M.
Read: Seeking Alpha contributor Kempano Investor thinks that the healthcare supply chain market where Premier ( PINC ) operates “is set to grow at an attractive rate.”
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Premier falls after slashing outlook amid layoffs