Vanguard Health Systems Beats Estimates But Has a Big Earnings Drop

Vanguard Health Systems (NYS: VHS) reported earnings on April 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q3), Vanguard Health Systems missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share contracted significantly. GAAP earnings per share contracted significantly.


Margins contracted across the board.

Revenue details
Vanguard Health Systems chalked up revenue of $1.50 billion. The 11 analysts polled by S&P Capital IQ predicted a top line of $1.60 billion on the same basis. GAAP reported sales were 5.3% lower than the prior-year quarter's $1.58 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.27. The 14 earnings estimates compiled by S&P Capital IQ anticipated $0.24 per share. Non-GAAP EPS of $0.27 for Q3 were 53% lower than the prior-year quarter's $0.57 per share. GAAP EPS of $0.26 for Q3 were 53% lower than the prior-year quarter's $0.55 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 18.7%, much worse than the prior-year quarter. Operating margin was 5.8%, 130 basis points worse than the prior-year quarter. Net margin was 1.4%, 140 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.57 billion. On the bottom line, the average EPS estimate is $0.21.

Next year's average estimate for revenue is $6.17 billion. The average EPS estimate is $0.76.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Vanguard Health Systems is outperform, with an average price target of $17.11.

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The article Vanguard Health Systems Beats Estimates But Has a Big Earnings Drop originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. 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.

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