Recently, we downgraded AmSurg Corporation (AMSG) to Underperform with a target price of $23.00. Although AmSurg recorded an 11% year-over-year growth in revenues during the fourth quarter of 2010, the company is witnessing several challenges in the near term, which gets reflected in its outlook for 2011. The company?s guidance of $740?$770 million in revenues resulting in EPS of $1.64?$1.68 was below our expectation of $1.78.
Among the various challenges witnessed by the company, economic uncertainty continues, affecting elective and screening procedures for the last few quarters. However, contrary to the previous trend of a 2% decline in same-center revenues during the first three quarters of 2010, the company?s same-center revenue remained flat during the fourth quarter. AmSurg has projected continued softness in same-center volume and although the company plans to open 18?20 new centers, same center revenues are expected to range within flat to -1% in 2011.
Additionally, AmSurg
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Jolene Blalock Nichole Robinson Monet Mazur Rozonda Thomas Rachel Weisz
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