Slowing admissions ding physician staffing giant Mednax in Q2

Mednax, a physician staffing company to hospitals, is the latest provider to miss its analyst earnings forecast for the second quarter.

Net income dipped to $63.7 million in the quarter on revenue of $842.9 million compared with net income of $82.3 million on revenue of $771.8 million in the year-earlier period, the company disclosed Friday.

Sunrise, Fla.-based Mednax buys physician practices and contracts doctors and advanced practice clinicians into specialty departments of hospitals, including neo-natalogy, radiology and anesthesiology.

Mednax saw the same slowing in hospital services in the second quarter that investor-owned hospital chains such as HCA and Community Health Systems reported in their second-quarter earnings disclosures.

Revenue from the physician practices that Mednax has owned for at least a year fell about 1% in the second quarter versus the year-earlier period, the company reported.

Performance in the second quarter was hurt by a higher mix of government-paid services as well as soft neo-natal volumes. The latter is a continuing issue as the U.S. birth rate declines.

"The trends we experienced earlier in the year, in both payer mix for anesthesia services and volume trends in neonatal services, remained a challenge during the quarter," said CEO Dr. Roger Medel.

In giving third-quarter guidance, Mednax said same-unit revenue would be flat to negative 2%. And earnings before interest taxes, depreciation and amortization are expected to fall 17% to 21% in the third quarter vs. the year-earlier period.

A composite of analysts had expected Mednax to earn 87 cents per share in the second quarter. The company posted earnings per share of 69 cents.