Accretive Health slumps following business update
Accretive Health slumps after company posts update; will finish restatement by March 19
NEW YORK (AP) -- Shares of Accretive Health weakened in morning trading Thursday after the company, which has not reported quarterly earnings in about a year, gave an update on the state of its business.
THE SPARK: Accretive Health helps hospitals manage their revenue. The company said it expects to finish restating its results and file its quarterly results with the Securities and Exchange Commission by March 19. Accretive Health said its results in late 2012 and early 2013 were hurt by client losses, the effects of an investigation of its business in Minnesota, and execution problems. It said those problems were related to its own rapid growth.
The company said it has 89 hospitals and $18 billion in net patient revenue.
THE BIG PICTURE: In early 2013, the Chicago company delayed the report of its fourth-quarter results, saying it was re-evaluating the way it recognizes revenue from contracts.
Accretive Health also said Thursday that Chairwoman Mary Tolan won't run for a new term, and it said two new directors joined its board Sunday. They are Robert Stanek, a former president and CEO of Catholic Health East, and Alex Mandl, a former chairman of digital security company Gemalto and former president and chief operating officer of AT&T Inc.
The Accretive Health Inc. board also approved the repurchase of $50 million in company stock.
THE ANALYSIS: Analyst Ryan Daniels of William Blair & Co. said there are assigns Accretive Health's business is stable, but its growth has slowed and the company has not provided a lot of details about what has happened to its business over the last year. He maintained a "Market Perform" rating on the stock.
THE STOCK: Accretive Health shares lost 49 cents, or 5.3 percent, to $8.78 in morning trading. The shares are down 23.5 percent since Feb. 26.
