Why LHC Group's Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of LHC Group (NASDAQ: LHCG  ) tumbled after the health-care services provider reported quarterly earnings last night. The stock dropped as much as 10% in today's session, and finished 5.3% lower.

So what: LHC, which specializes in post-acute health-care services, said that revenue grew 2.5%, to $161.8 million, and earnings per share edged up from $0.39, to $0.43, which beat estimates of $0.37. What threw a wrench into the works was its scaled-down guidance for 2013. The company now sees earnings per share of $1.10 to $1.30 against expectations of $1.51. Management said that cuts to Medicare from sequestration would shave $0.30 off the year's per-share profits.

Now what: Oddly, LHC's revenue guidance of $660 million to $680 million was above analyst projections of $658 million. While sequestration was signed into law on March 1, there is still the possibility of a compromise that would restore LHC's missing profits. Keep an eye out for any changes on the federal level, as they could provide a jolt to the stock.

Get more on LHC Group. Add the company to your Watchlist here.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2300771, ~/Articles/ArticleHandler.aspx, 4/1/2015 2:01:23 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!