Poor weather conditions and a weaker pay mix are the two main factors that Air Methods’ CEO Aaron D. Todd singled out as having wreaked havoc on the company’s performance. Thankfully, the weather is expected to improve significantly in the coming months and the firm can look forward to brighter days. Todd injected a note of caution when he expressed guarded optimism for the company’s financial outlook by intoning that other factors could be to blame for the dismal performance in the first quarter as well. These factors might also come to play in the remaining trading period.
Forward-looking statements
What should investors expect of Air Methods Corp (NASDAQ:AIRM) in the remaining three quarters of 2013? Estimates for second-quarter earnings per share are $0.56, which is a huge improvement over the first quarter net loss of $0.16 per share. Average earnings per share for 2013 is expected to $1.90, which means that the fourth quarter’s estimated earnings per share is expected to be over $2.00. There are a few factors that could negatively impact on Air Methods’ performance. Some of these are:
The size, growth and structure of the firm’s United Rotorcraft Division and Air Medical Services
Patient transports collection rates
Weather conditions
Medical Services Contracts renewals
Increased regulation of Aviation Industry and the Health Care Industry
How the “Patient Protection and Affordable Care Act” will impact on its business
Conclusion
Of all the above factors, the single factor likely to have the biggest impact is the prevailing weather conditions in the coming months. Current weather predictions say that we are likely to see fair weather for the remaining six months of the year. Unless lightning strikes twice and Air Method goes on to miss analysts’ estimates by a wide margin again (a highly unlikely scenario), we can therefore say with a fair degree of certainty that Air Methods Corp (NASDAQ:AIRM) is likely to see positive growth in revenues and earnings in the remaining three quarters of 2013. The stock is likely to be bullish in the short to mid-term. If you own this stock, please hold or buy if you don’t already have it in your portfolio.
The article For This Stock, It Is Hold or Get Ready to Move In originally appeared on Fool.com and is written by Naomi Warmate-Igwe.
Naomi Warmate-Igwe has no position in any stocks mentioned. The Motley Fool recommends Air Methods, Express Scripts, and UnitedHealth Group. The Motley Fool owns shares of Express Scripts. Naomi is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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