What happened
Healthcare efficiency specialist Premier (PINC +0.00%) was looking decidedly unhealthy as far as its stock performance was concerned on Tuesday. After the company dropped its latest set of quarterly results, a great many investors sold their shares, leaving the stock with a nearly 20% decline. Even the gloomy S&P 500 index did better on the day, with a relatively light 1.3% fall.
So what
For its fiscal third quarter of 2023, Premier's net revenue amounted to just over $322 million, a figure that was down 7% on a year-over-year basis. On a brighter note, the company's non-GAAP (adjusted) net income crept higher, rising at a 2% clip to hit nearly $69.5 million, or $0.58 per share.
Analysts were expecting better, though. Collectively they were modeling almost $351.6 million for net revenue. They also believed the company would post a slightly higher adjusted net income figure of $0.59 per share.
Describing its current business landscape as "challenging and uncertain," Premier said that its direct sourcing business in particular had a tough quarter. The company quoted CEO Michael Alkire as saying that the activity "continues to be impacted by excess market supply and member inventory levels which contribute to lower demand and pricing."
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Key Data Points
Now what
More impactfully, Premier lowered both its revenue and profitability guidance. In trimming its expectations for both its supply chain operations and its performance services, it's now modeling $1.34 billion to $1.39 billion in total company net revenue for the entirety of 2023; previously this range was $1.38 billion to $1.45 billion. The new projection is also under the average analyst estimate of $1.40 billion.
As for earnings, Premier set new adjusted net income guidance for $2.43 to $2.55 per share for the year, where formerly it expected $2.53 to $2.65. Collectively, prognosticators following the stock are estimating $2.55.
