Naples-based Health Management Associates announced Monday it will sell three hospitals. The move is part of an effort to shore up shaky earnings. After the sale of the three hospitals in West Virginia and Arkansas, H-M-A will operate 59 facilities in 14 states. The sale comes a few months after the rural hospital operator announced its earnings had slowed. Executives blamed soaring Medicare costs, a jump in uninsured patients and malpractice insurance hikes. But analyst Sheryl Skolnick of C-R-T Capital says H-M-A shouldn’t stop now...
“Perhaps focusing more on the company’s roots of rural hospitals as opposed to things that look a whole lot more urban like the Orlando region. Or even the west coast of Florida. I would hesitate to describe Naples as a rural market.”
H-M-A recently purchased the former Cleveland Clinic in Collier County. Skolnick says she wouldn’t be surprised if H-M-A sells even more unprofitable hospitals in the coming months.
Shares of Health Management Associates start the day three-percent higher. It comes after the Naples-based rural hospital operator announced it plans to sell three of its facilities in West Virginia and Arkansas. H-M-A has reduced its earnings outlook this year and hinted a few months ago it might sell some operations. H-M-A owns about 60 hospitals nationwide and had been on a buying spree the last few years. But now analyst Sheryl Skolnick of C-R-T Capital says this latest message is confusing.
“This is inconsistency of we get big. We get small. We get big. We get small. [It] can make one feel a little bit like you’re watching a tennis match as opposed to watching a company with a very clear, long-term strategic growth plan.”
Tuesday, 25 July 2006 01:00