DaVita Inc. (DVA) Reports Solid Earnings Growth and Robust Cash Flow in Q3 2023
DaVita Inc. (NYSE:DVA) announces a net income increase to $247 million in Q3 2023 from $179 million in Q2 2023.
Adjusted diluted earnings per share rose to $2.85 in Q3, up from $2.08 in the previous quarter.
Operating cash flow remained strong at $661 million, with free cash flow of $453 million.
Revenue per treatment increased, reflecting favorable changes in commercial and Medicare Advantage mix.
On November 7, 2023, DaVita Inc. (NYSE:DVA) released its financial results for the third quarter ended September 30, 2023. The company reported consolidated revenues of $3.1 billion, with an operating income of $496 million and an adjusted operating income of $525 million. The diluted earnings per share (EPS) was $2.62, and the adjusted diluted EPS was $2.85. The operating cash flow for the quarter was a robust $661 million, and the free cash flow was $453 million.
Financial Performance Overview
DaVita Inc. (NYSE:DVA) delivered a strong financial performance in the third quarter of 2023. Net income attributable to DaVita Inc. for the quarter was $247 million, a significant increase from $179 million in the previous quarter. Over the nine months ended September 30, 2023, net income reached $541 million, compared to $492 million for the same period in 2022. The company's operating income margin improved to 15.9% for the quarter, up from 13.5% in the prior quarter, indicating enhanced profitability.
Income Statement Highlights
DaVita Inc. (NYSE:DVA) reported a net income of $247 million for the quarter, translating to $2.62 per diluted share. Adjusted net income, which excludes certain non-GAAP items, was $268 million, or $2.85 per adjusted diluted share. This represents a notable improvement from the $194 million, or $2.08 per adjusted diluted share, reported in the previous quarter. The company's revenue per treatment increased to $380.33, up from $376.73 in the prior quarter, primarily due to favorable changes in commercial and Medicare Advantage mix and a net increase in average reimbursement rates.
Balance Sheet and Cash Flow Statement Insights
DaVita Inc. (NYSE:DVA) maintained a strong balance sheet with significant operating cash flow of $661 million for the quarter, although slightly lower than the $711 million reported in the same period last year. Free cash flow was also substantial at $453 million, compared to $500 million in the prior year's quarter. These figures underscore the company's ability to generate cash and maintain financial flexibility.
Operational Highlights and Challenges
CEO Javier Rodriguez commented on the quarter's results, stating,
We delivered another strong quarter,"
and highlighted the company's focus on operating discipline and investment in future growth. DaVita Inc. (NYSE:DVA) faced a slight decrease in U.S. dialysis treatments per day, with a 0.2% drop compared to the second quarter of 2023. However, normalized non-acquired treatment growth was positive at 0.5% year-over-year.
The company continued to manage its outpatient clinic capacity, resulting in higher than normal charges for center closures due to strategic reviews initiated in the third quarter of 2022. These closures are part of DaVita Inc. (NYSE:DVA)'s ongoing efforts to optimize its operations and increase the proportion of home dialysis patients.
Outlook and Investor Relations
DaVita Inc. (NYSE:DVA) will hold a conference call to discuss the third-quarter results, providing an opportunity for investors to gain further insights into the company's performance and strategies. The call details and access information are available on the DaVita Investor Relations website.
In summary, DaVita Inc. (NYSE:DVA)'s third-quarter earnings report reflects a company that is successfully navigating operational challenges while delivering solid financial results. The company's focus on operational discipline and strategic investments positions it well for sustained growth and profitability.
Explore the complete 8-K earnings release (here) from DaVita Inc for further details.
This article first appeared on GuruFocus.
