Please ensure Javascript is enabled for purposes of website accessibility

Why Air Methods Corp. Shares Sank 12% Today

By Todd Campbell – Sep 8, 2016 at 4:21PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Air Methods' August transport data disappoints investors.

Image source: Air Methods Corp.

What happened

After providing investors with preliminary patient transport and tourism passenger data for the month of August, shares in Air Methods Corp. (AIRM) slipped by 11.9% today.

So what

Air Methods is a global leader in air medical transportation and its air medical services division is the largest provider of air medical transport services in the United States. 

The company estimates that August transports rose 2.2% from last year and that fiscal third-quarter transports are 5.9% higher than the comparable period a year ago. August transports would have been much bigger if not for cancellations. Weather-related cancellations as a percent of requests for patient transport grew to 19.8% in August, which was far greater than the 14.8% average rate for weather cancellations in August between 2011 and 2015.

Data source: Air Methods Corp.

Now what

In July, Air Methods released preliminary fiscal second-quarter results that disappointed investors, and in early August, official second-quarter results showed that sales grew 11% year over year to $293 million and EPS grew 1.4% year over year to $0.70. Both results were below industry watchers' forecasts.

The uptick in weather cancellations last month creates headwinds that could make it harder for Air Methods to reaccelerate financial results this quarter. Nevertheless, Air Methods results can vary widely from quarter to quarter, so investors might not want to give the August transport numbers too much weight, especially since this disappointment wasn't caused by operational missteps.

AIRM Revenue (Quarterly) Chart

AIRM Revenue (Quarterly) data by YCharts.

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. Like this article? Follow him on Twitter where he goes by the handle @ebcapital to see more articles like this. The Motley Fool recommends Air Methods. 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Air Methods Corporation Stock Quote
Air Methods Corporation
AIRM

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.