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Investing.com -- Premier, Inc. (NASDAQ: PINC) shares tumbled by 13% after the healthcare improvement company reported quarterly earnings that fell short of Wall Street expectations. The Charlotte-based company disclosed its second-quarter earnings per share (EPS) at $0.25, which was $0.04 below the analyst estimate of $0.29. Revenue also came in under the consensus, with the reported $240.26 million against the expected $242.79 million.
The company has also provided its fiscal year 2025 guidance, projecting an EPS range of $1.26-$1.34, compared to the consensus estimate of $1.29. Revenue forecasts for the same period are anticipated to be between $0.94-1.01 billion, with the consensus at $0.99 billion. Despite the lower-than-anticipated quarterly results, Premier is maintaining its guidance midpoints for total net revenue excluding Contigo Health and adjusted EBITDA, while increasing the midpoint of adjusted earnings per share guidance by $0.08.
Premier’s President and CEO, Michael J. Alkire, commented on the results, emphasizing that the company’s overall revenue and profitability for the first half of fiscal 2025 were in line with expectations, due to better than expected results in the Supply Chain Services segment. Alkire also noted that the company is reaffirming the midpoints of its consolidated fiscal 2025 revenue and adjusted EBITDA guidance, despite challenges in the Performance Services segment, and is increasing its adjusted earnings per share guidance.
The financial results reflect a significant GAAP net loss from continuing operations of $45.8 million, which includes a substantial $126.8 million impairment charge to goodwill related to the company’s data and technology business in the Performance Services segment. This compares to the net income from continuing operations of $50.4 million in the prior-year period. The adjusted EPS, excluding Contigo Health, stood at $0.27.
In terms of operations, the company’s Supply Chain Services segment saw a decrease in net administrative fees revenue by 13%, while software licenses, other services, and support revenue increased by 10%. The Performance Services segment experienced a 19% decrease in net revenue, mainly due to lower demand in the consulting business and product mix in the applied sciences business.
Premier’s liquidity position showed cash and cash equivalents of $85.9 million as of December 31, 2024, down from $125.1 million as of June 30, 2024. The company’s operating cash flow for the six months ended December 31, 2024, was $193.7 million, an increase from the prior-year period, mainly due to a decrease in cash taxes paid and cash received from settlements and distributions.
The company also highlighted its return of capital to stockholders, including the completion of an additional $200 million share repurchase in early January, and the declaration of a quarterly cash dividend of $0.21 per share, payable on March 15, 2025.
While Premier’s stock has faced a downturn following the Q2 earnings release, the company’s reaffirmed guidance and increased adjusted EPS midpoint suggest a level of confidence in its financial strategy moving forward.
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