UPDATE 2-Amedisys Q1 beats market view; ups 2010 EPS outlook

* Q1 EPS $1.29 vs est $1.28

* Rev $413 mln vs est $407.4mln

* Ups 2010 EPS to $5.50-$5.70 from $5.40-$5.60

* Backs 2010 rev view $1.70 bln-$1.75 bln

* Shares down as much as 8 pct
(Adds conference call details, analysts comments; updates
stock movement)

By Krishnakali Sengupta

BANGALORE, April 27 (BestGrowthStock) – Home health and hospice
care provider Amedisys Inc (AMED.O: ) reported higher quarterly
earnings that narrowly topped estimates, but its shares fell as
much as 8 percent on investor expectations of a bigger beat.

Two analysts said expectations were higher as Amedysis, the
biggest player in the home health space, had a history of
beating consensus by a large margin.

“It was a very good start to the year for the company. Any
weakness in the stock we would definitely view as a buying
opportunity for the stock,” analyst Newton Juhng of BB&T
Capital markets said.

For 2010, the company raised its earnings expectations by
10 cents to between $5.50 a share and $5.70 a share, compared
with market expectations of a $5.61 a share.

On a conference call with analysts, Amedisys Chief
Executive William Borne said it expects a reduction of 3
percent to 4 percent in reimbursements in 2011, depending on
the payment reimbursement update to be determined by the
Centers for Medicare and Medicaid Services.

Oppenheimer & Co analyst Michael Wiederhorn remained
positive on the stock saying the reported 13 percent admission
growth indicated long-run volume growth for the company.

“We continue to believe Amedysis is one of the
best-positioned companies in our universe, and the company
should become more acquisitive, which should drive the stock,”
the analyst added.

The company said reimbursement pressure will create
acquisition opportunities as home health agencies have started
to feel the bottom-line impact of reimbursement cuts.

However, some analysts speculated that some of the pressure
on Amedisys arose from a media article that alleged the company
was taking unethical advantage of the Medicare reimbursement

An article published on the Wall Street Journal on Tuesday
said a number of companies from the home health industry,
including Amedysis, gave many of its patients just enough
therapy visits to trigger an additional Medicare payment.

“The article was somewhat negative on Amedisys and the
industry as a whole, and that could put pressure on the company
and other home-health players today,” analyst Tony Perkins of
First Analysis Securities Corp said.

Shares of Amedisys’ peers like Gentiva Health Services Inc
(GTIV.O: ), LHC Group Inc (LHCG.O: ) and Almost Family Inc (AFAM.O: )
were all trading down around 2 percent Tuesday afternoon.

Others, however, said the issue in the article was “long
awaited,” brought up almost three years ago, and that Medicare
had since adjusted reimbursement to prevent abuse.


The company posted first-quarter net income of $36.8
million, or $1.29 a share, compared with a net income of $27
million, or 99 cents a share, a year earlier.

Net service revenue for the quarter rose 21 percent to $413
million. Analysts on average were expecting revenue of $407.4
million, according to Thomson Reuters I/B/E/S.

The company also backed its 2010 net service revenue
outlook of $1.70 billion to $1.75 billion, compared with
analysts expectations of $1.74 billion.

Shares of the Baton Rouge, Louisiana-based company were
trading down about 1 percent at $59.93 on Tuesday afternoon
Nasdaq. They had earlier touched a low of $55.62

Stock Market Investing

(Reporting by Anuradha Ramanathan and Krishnakali Sengupta in
Bangalore; Editing by Unnikrishnan Nair, Roshni Menon)

UPDATE 2-Amedisys Q1 beats market view; ups 2010 EPS outlook