What happened
Shares of Premier (NASDAQ: PINC) are down 15.5% this week as of 12:05 p.m. ET Friday, according to data provided by S&P Global Market Intelligence, after the healthcare-improvement leader announced mixed fiscal fourth-quarter results as it continues to move forward in its assessment of potential strategic alternatives.
Indeed, the bulk of Premier's declines this week came on Wednesday, the first trading day after its quarterly update hit the wires.
So what
For its fiscal Q4 2023 (ended June 30, 2023), Premier's net revenue declined slightly from the same year-ago period to $340.4 million, falling short of analysts' consensus estimates for sales closer to $355 million. That translated to net income attributable to stockholders of $21.5 million, or $0.18 per share, down 28% from $0.25 per share a year earlier. On an adjusted (non-GAAP) basis, Premier's earnings per share (EPS) climbed 11% year over year to $0.68, technically exceeding estimates for adjusted earnings of $0.65 per share.
Premier CEO Michael Alkire thanked his employees for their "hard work and ongoing committment" in what he described as a "very challenging market environment."
Now what
Premier also closed on the sale of its non-healthcare Group Purchasing Organization (GPO) operations during the quarter and is currently evaluating the highest-return opportunities for redeploying the proceeds of the sale. Premier's board and management team are continuing to make progress in their evaluation of other potential strategic alternatives, Alkire says, including "reinvesting in the business, acquisitions that enhance the value of our business, and/or the potential to return capital to stockholders."
In the meantime, Premier reiterated that it will not provide fiscal-2024 guidance as it progresses with its strategic review.
Though Premier appears to be striving to maximize shareholder value, it's not exactly inspiring confidence with investors given the combination of its difficult market environment, the spinning off of non-core assets, and uncertainty regarding its exploration of additional strategic alternatives.
For now, with so many other promising stocks in which investors can put their money to work, it's hardly surprising to see this leading healthcare stock remaining under pressure.
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