Kindred Healthcare Beats Expectations but Takes a Step Back Anyway

Kindred Healthcare (NYSE: KND  ) reported earnings on Aug. 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Kindred Healthcare missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share expanded.

Gross margins dropped, operating margins dropped, net margins improved.

Revenue details
Kindred Healthcare notched revenue of $1.54 billion. The nine analysts polled by S&P Capital IQ expected revenue of $1.58 billion on the same basis. GAAP reported sales were 19% higher than the prior-year quarter's $1.29 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.41. The nine earnings estimates compiled by S&P Capital IQ averaged $0.37 per share. GAAP EPS were $0.29 for Q2 versus -$0.13 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 33.9%, 60 basis points worse than the prior-year quarter. Operating margin was 3.3%, 20 basis points worse than the prior-year quarter. Net margin was 1.0%, 140 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.55 billion. On the bottom line, the average EPS estimate is $0.26.

Next year's average estimate for revenue is $6.24 billion. The average EPS estimate is $1.49.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 132 members out of 143 rating the stock outperform, and 11 members rating it underperform. Among 42 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give Kindred Healthcare a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Kindred Healthcare is hold, with an average price target of $11.64.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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