DaVita shares fall 8.8% after hours despite Q3 profit beat

DaVita Inc. (DVA) said on Oct. 29 that adjusted diluted earnings per share for the quarter ended Sept. 30 were $3.82, above the $3.64 consensus estimate compiled by Finnhub. Revenue of $3.578 billion was above the $3.54 billion estimate.

Shares fell 8.8% in after-hours trading as of 4:29 p.m. ET, from a regular-session close of $193.25. A press release furnished with the company's 8-K contained the results.

DaVita provided dialysis services to about 298,100 patients at 3,269 outpatient dialysis centers as of Sept. 30, including 2,671 in the United States. Operating income for the quarter was $499 million, a 14.0% margin, and adjusted operating income was $561 million, or 15.7%.

Here's how the company did:

• Adjusted EPS: $3.82 vs. $3.64 expected, according to Finnhub
• Diluted EPS: $3.40 vs. $2.04 a year earlier
• Revenue: $3.578 billion vs. $3.420 billion a year earlier, and $3.54 billion expected according to Finnhub

Net income attributable to DaVita was $223 million, compared with $150 million a year earlier. Diluted shares averaged 65.5 million, down from 73.8 million.

Operating cash flow was $519 million, against $842 million a year earlier. Free cash flow was $276 million, against $604 million.

2026 guidance

The company raised the low end of its 2026 adjusted operating income forecast to $2,175 million, from $2,150 million, and kept the high end at $2,250 million.

Its adjusted diluted EPS forecast is now $14.30 to $15.20, up from the $14.10 to $15.20 range it gave on Aug. 4. Its free cash flow forecast of $1,000 million to $1,250 million was unchanged.

Segment results

U.S. dialysis operating income was $544 million on total operating revenues of $3.050 billion. Average patient service revenue per treatment was $415.25, compared with $415.87 in the second quarter.

The company provided 7,329,644 U.S. dialysis treatments in the quarter, an average of 92,780 per day, up 0.1% from the second quarter.

International operations posted an operating loss of $16 million, after operating income of $25 million in the second quarter. Integrated kidney care operating income was $4 million.

Costs and charges

The company recorded a $62 million non-cash goodwill and other asset impairment charge tied to its business in China. After a $1 million tax benefit and a $34 million credit to noncontrolling interests, the charge reduced net income attributable to DaVita by $27 million, according to the filing.

General and administrative expenses were $408.7 million, compared with $414.4 million a year earlier.

Cash and capital returns

The company repurchased 0.6 million shares for $111 million in the quarter, at an average price of $186.21 per share.

From Sept. 30 through Oct. 27, it repurchased a further 0.5 million shares for $87 million, at an average price of $180.57 per share.

Total debt was $10,832 million at Sept. 30, and the leverage ratio was 3.38x, the company said in its regulatory filing.