Apria’s Net Income Declines 35%
Apria Healthcare Group Inc., the nation’s largest supplier of home healthcare equipment and services, said Tuesday that profit fell 35% in the third quarter and that it had dropped efforts to find a buyer.
The Lake Forest-based company’s board made the decision after concluding that none of the proposals it had received “appropriately reflected Apria’s intrinsic value and prospects for future appreciation,” the company said in a statement.
Apria hired Morgan Stanley in June to find potential buyers but acknowledged Tuesday that there had been only tepid interest in the company, which has been hurt by a cut in Medicare reimbursement rates.
Apria, confirming earlier projections, also reported that net income for the third quarter was $19.3 million, or 38 cents a share, down from $29.8 million, or 60 cents, a year earlier. On average, analysts polled by Reuters had predicted 35 cents.
Revenue rose to $367.6 million from $364.6 million in the same period last year. Excluding the effect of the Medicare cuts, revenue grew 3%, Apria said.
Higher gas prices contributed to a $1.8-million, or 0.8%, increase in Apria’s expenses, as did the acquisition of five businesses. Since the beginning of the year, the company has purchased 19 firms for a total of almost $100 million.
Apria said it had made several new deals and was poised for growth. It said it had signed a new three-year contract with Cigna HealthCare, renewed a Kaiser Permanente deal for five years and expanded a contract with Aetna Inc.
The company forecast 5% revenue growth for 2006 and an increase in earnings per share of about 20%.
Apria shares fell 8 cents to $23.05. They hit $36.75, a 10-year high, in early June when Apria announced it was looking for a buyer.
Wachovia analyst Bill Bonello upgraded his rating on the stock to “market perform” from “underperform” before the earnings report, taking the view that the share price was unlikely to get much lower. And next year’s financial performance is bound to improve, if only by comparison, he said.
“There is actually some incrementally positive things happening in that they have added a new chunk of business,” he said.
Also
* Guitar Center Inc. of Westlake Village said sales growth at its namesake musical instrument stores boosted third-quarter net income 16.1% to $14.4 million, or 51 cents a share, from $12.4 million, or 45 cents, a year earlier. Sales rose 18.6% to $421.1 million.
* Edwards Lifesciences Corp. swung to a third-quarter net loss of $4.4 million, or 7 cents a share, contrasted with a profit of $12.4 million, or 20 cents, a year earlier. The Irvine-based maker of heart valves said that excluding one-time charges, earnings increased 23% to $29 million. Revenue grew 7.2% to $240.9 million.
* FileNet Corp. of Costa Mesa reported that third-quarter net income rose 33% to $8.5 million. The maker of software for document management said sales rose 5.3% to $101.6 million.
