IPC The Hospitalist Falls on Lowered Outlook

Shares of IPC The Hospitalist Co Inc (NASDAQ: IPCM) are tumbling more than 27% in morning trade after the company warned that it would miss both sales and earnings targets. The company now projects 2011 earnings of $1.70 to $1.74 per share. The company expects revenue to come in at $455 million to $458 million.

The company had earlier forecasted earnings of $1.78 to $ 1.86 per share, on revenue of $463 million to $465 million. The new forecasts are lower than analyst forecasts. Analysts were looking for earnings of $1.77 per share on revenue of $464.1 million.

Adam D. Singer, M.D. noted, “At the mid-point of the ranges of our estimated net revenue, we grew the top line 26% over reported net revenue of $363.4 million for the full year 2010 and 20% over reported net revenue of $97.2 million for the fourth quarter of 2010. At the mid-point of our estimated earnings per diluted share range, we grew 18% compared to reported earnings per diluted share of $1.46 for the full year 2010 and 17% over reported earnings per diluted share of $.042 for the fourth quarter of 2010.

Our patient encounters, our estimated net revenue and our provider work force for both the full year and the fourth quarter of 2011 were at an all-time high. For the full year, we added a net of approximately 168 providers, 68 of which were added during the fourth quarter. During 2011, we completed 13 acquisitions, five of which were completed during the fourth quarter.

Citing unexpected softness in patient volumes in certain practices Mr Singer stated “Our previous revenue guidance assumed an increase in encounters in the fourth quarter as compared to the third quarter of this year based on the increase in the number of providers and our history of increased productivity per provider in prior fourth quarters.

While we added the number of providers we expected in the quarter and grew encounters and revenue, we experienced unexpected softness in patient volumes in certain practices around the country, which resulted in lower than estimated revenue. In addition, the continued use of temporary staffing at several of our larger practices and start-up costs to open several new de novo practices negatively impacted our profitability.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.