Shares of Cross Country Healthcare Inc. (NASDAQ:CCRN), a provider of healthcare workforce solutions and staffing services, were shedding 27% of their value as of 10:55 a.m. EDT on Thursday after the company missed second-quarter estimates.
Revenue for the second quarter checked in at $204.6 million, falling short of analysts' estimates calling for $208.9 million, and 2% short of its prior-year results. Adjusted earnings per share came to $0.05, also below analysts' estimates calling for $0.06. Financial metrics were down across the board, with gross profit margin declining by 80 basis points, net income down 68%, and cash flow from operations down 81%, compared to the prior year.
Cross Country Healthcare also announced that it has elected a new independent director, Darrell S. Freeman Sr., whom management hopes will help grow the business. Chairman Thomas C. Dircks said in a press release: "The Board and I are highly enthused that Darrell will be joining us. His staffing, outsourcing, technology and healthcare expertise and insights will be valuable to both the Board and management."
The driving force behind the rough second quarter was a spending pullback from some of the company's larger customers, which was large enough to offset the growth from its new managed-service programs. Management believes it can make necessary adjustments to its business strategy and return to year-over-year growth, although investors seem a little less optimistic, given today's 27% plunge in the stock price. Remember that the company has been trying to turn things around for some time.