3 Beyond-the-Numbers Takeawayshttp://www.fool.com/investing/general/2012/08/06/3-beyond-the-numbers-takeaways.aspx Keith Speights
August 6, 2012
If you only looked at the numbers with no context, you might be disappointed with the second-quarter earnings for dialysis services provider DaVita (NYSE: DVA ) . The company announced earnings per share of $0.99, down from $1.03 in the same quarter last year.
As Foolish investors know, though, there is more to analyzing a company and its stock than just looking at the numbers. Here are three takeaways from DaVita's latest earnings results that go beyond the numbers.
1. There can be gaps when depending only on GAAP.
In DaVita's case, the lower earnings were due to a one-time event. The company accrued $78 million in connection with a settlement of litigation related to alleged false Epogen claims. In his comments during the earnings conference call, DaVita CEO Kent Thiry stated that the company didn't believe that any actual wrongdoing was committed but that "sometimes agreements like this are in your best interest."
DaVita's earnings excluding one-time events were nearly 25% higher than in the same quarter last year.
2. Growing pains can accompany growth.
The company is new to the international market. Its first real efforts began only in the fourth quarter of 2011, starting with 11 dialysis centers in three countries -- Germany, India, and Singapore. DaVita's international presence now includes Malaysia and Saudi Arabia. It plans to begin operating in China later this year.
According to U.S. Renal Data Systems, the prevalence of end stage renal disease (ESRD), which requires regular dialysis, is growing annually in virtually every country reporting data. While DaVita could encounter more losses with its international efforts in the near-term, the opportunities look promising over the long run.
3. The future looks good.