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HMS Holdings Q1 slumps, revenue up 30%

Published: 18:44 27 Apr 2012 BST

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HMS Holdings Corp. (NASDAQ:HMSY) said Friday that fiscal first-quarter earnings fell, despite reporting a 30 percent increase in revenue as it cut its full-year outlook.

The New York-based company offers cost containment services to government and private healthcare payers and sponsors.

Earnings slipped to $7 million, or eight cents per share for the quarter ended March 31. That is down from $9.8 million, or 11 cents per share, last year.

On an adjusted basis, the company earned 16 cents a share, compared with 14 cents a share. Analysts expected 13 cents a share.

Sales jumped to $107.3 million from $82.5 million, lagging behind analyst estimates for $114 million, according to Bloomberg.

"HMS opened the year with mixed results," HMS' chief executive Bill Lucia said in a statement Friday.

"We’re pleased with the performance of HDI, which exceeded Medicare RAC revenue targets for the quarter."

The CEO went on to say that its Medicaid business was impacted by "temporary challenges" its clients and carries faced in adopting new claim transaction formats.

In addition, the company noted uncertainty surrounding the Supreme Court’s review of the Affordable Care Act added further delays in state decision-making RAC procurements.

For full-year 2012, the company revised both its sales and earnings outlook. It now estimates sales of between $500 and $515 million, down from its prior sales forecast of $520 million.

It also projected adjusted earnings in the range of 91 and 96 cents a share, down from its original out-look of 98 cents.

Analysts foresee earnings of 78 cents a share, on $520 million in revenue.

The company’s share price fell as much as 8.18 percent descending to $24.01 apiece in trade on the Nasdaq on Friday afternoon.

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