Healthways, Inc. (NASDAQ:HWAY) Reports 4Q Results below Analysts’ Estimate

Healthways, Inc. (NASDAQ:HWAY) reported fourth quarter results on Tuesday
evening, after the markets closed, with an increase of 108% year over year in
net income. The company reported fourth fiscal quarter net earnings of $15.6
million or 45 cents a share, an increase of 108% from $7.5 million or 22 cents a
share, for the same period a year ago. In December, the company announced final
settlement with CMS, which contributed $22.3 million in revenue during the
quarter, or roughly $0.20 per share.   Excluding these items, Healthways
reported EPS of $0.25, just below the street estimate of 26 cents a share.
Operating earnings were up roughly 30% annually to $29.3 million, but much of
the increase was again driven by the CMS settlement. Sales during the quarter
were $195.3 million, up 11.47% from last years sales of $175.2 million and
missing consensus estimates of $197.1 million by $1.8 million. Margins were
solid in the quarter, with gross margin registering at 28.8%, increasing 290
basis points year-over-year. Adjusted EBITDA margins came in at 17.2%, improving
77 basis points year-over-year. Cash flows were also solid for the quarter, with
operating cash flow of $32 million, more than 200% of net income and free cash
flow at $23 million, roughly 150% of net income. The company announced that for
fiscal 2011, it expects revenue to be in the range of $672-$710 million and net
income per diluted share (EPS) in a range of $0.90 to $1.08. Embedded in the
earnings are contributions from the Domestic segment of $0.94-$1.04 per share
and from the International segment of ($0.04)-$0.04 per share.  Analysts on an
average were expecting the Company to report revenue of $677 million and EPS of
$1.04 for fiscal 2011. The Stock gained $1.07 or 8.39% and closed at $13.82
after opening at $13.32 and trading in the range of $13.18-$14.22 on volume of
896,357 shares. The stock has 52 week trading range of $9.50-$17.83. The market
capitalization of the stock stands at $474.18 million with P/E of 12.28 and beta
of 1.43. Healthways, Inc. provides solutions to help people to maintain or
improve their health. The Company's health, prevention and well-being services
are made available to consumers via phone, direct mail, the Internet,
face-to-face consultations and venue-based interactions. Disclaimer: The
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