NightHawk Radiology posts Q4 in line with the Street
NightHawk Radiology Holdings, Inc. (Nasdaq: NHWK) reported fourth-quarter earnings in line with the Street after the close Wednesday, but guided below the consensus on Wall Street sending shares barreling downward this morning.
The provider of radiology services to radiology groups and hospitals in the United States guided for fiscal 2008 revenue to be in the range of $195 million to $205 million, and adjusted earnings per diluted share in the range of $1.10 to $1.20 for the year. The guidance was below the consensus of five analysts surveyed by Thomson Financial of earnings of $1.25 per share on revenues of $211.89 million.
“Surprisingly, management lowered its 2008 guidance,” Piper Jaffray analyst Sean Wieland wrote in a research note today. “We believe the new guidance reflects some of the fundamental trends that challenge the teleradiology business: high penetration rates, competition, and reimbursement.”
On account of the new guidance, Wieland lowered his revenue and earnings estimates for the year as well as his target price. The analyst is now forecasting revenue of $201.8 million, down from $210.3 million; and earnings per share of $1.18, down from $1.28. Wieland’s new target price is now $15, down from $19.
“While 2007 was a transition year for NightHawk, the guidance implies that this continues to be a market that poses increasing difficulty to its participants,” the analyst wrote.
Investors were keenly focused on the company’s disappointing guidance that they breezed past the small cap’s fourth quarter results, which were in line with the Street.
For the three months ended Dec. 31, 2007, the Coeur d'Alene, Idaho-based company recorded adjusted net income of $8.1 million, or $0.26 per diluted share, in line with the Thomson Financial mean estimate. The current quarter’s bottom-line surged 72% to from $4.7 million, or $0.15 per diluted share recorded in the fourth quarter of 2006.
The company’s fourth quarter saw lower scan volumes due to greater-than-expected seasonality and a delay in transitioning the company’s former Radlinx physician contracts to its compensation model.
Revenue increased 77% to $42.7 million from $24.1 million in the fourth quarter 2006.
Shares of NightHawk Radiology (NHWK) slid 13.64%, or $1.93, to $12.22 1:08 p.m. ET. Shares of NightHawk Radiology have been trading in the range of $11.52 to $25.95 for the past 52 weeks. Typical volume for NightHawk’s stock is 378,952 shares.
