Dialysis firm DaVita misses third-quarter profit estimates on higher costs
Updates shares, adds details from conference call in paragraphs 3-7
By Sneha S K
Oct 29 (Reuters) -Dialysis firm DaVita DVA.N reported third-quarter profit below WallStreet estimates on Tuesday due toincreased labor costs and other expenses tied to patient care, sending its sharesdown 5.3% after the bell.
DaVita provides dialysis and kidney care services in the United States through a network of outpatient clinics and at-home dialysis services.
The company said the increase in patient care costs during the quarter was due to higher compensation, health benefit expense, and other direct operating expenses associated with its dialysis centers.
On an adjusted basis, it reported a profit of $2.59 per share, below analysts' estimate of $2.73 per share, as per data compiled by LSEG. Patient care cost per treatment rose to $257.46 from $255.25 in the second quarter.
DaVita also said it expects a minimal impact from disruptions caused by recent hurricanes. The disruptions include a shortage of IV fluids and dialysis products after an outage at a Baxter International BAX.N facility due to Hurricane Helene.
The shortage had led to some hospitals deferring certain procedures.
DaVita said it expects to resume new patients on peritoneal dialysis treatment next month, and expects supply dynamics to normalize in the first quarter.
"Baxter is now able to supply us with approximately 60% of their pre-storm levels as they continue their work to bring the North Cove facility back online," DaVita CEO Javier Rodriguez said during a conference call.
DaVita estimates a $10 to $20 million impact to fourth-quarter results due to high supply costs and lower new patient starts.
"Based on the firm's guidance, we suspect the storm-related challenges will not materially affect DaVita's results much beyond that," said Morningstar analyst Julie Utterback.
DaVita posted quarterly revenue of $3.26 billion versus analysts' estimates of $3.25 billion.
During the three months ended Sept. 30, DaVita incurred charges for closures of its U.S. dialysis centers of about $18.3 million. These closures increased patient care costs by $3.5 million, the dialysis firm said.
Reporting by Sneha S K in Bengaluru; Editing by Maju Samuel
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