Air Methods Corp (AIRM) Cuts Q3 Outlook

Air Methods Corp (NASDAQ: AIRM) provided an update on third quarter results. While community-based patient transports for the third quarter 2014 increased 7% to 15,789 from the prior-year quarter, patients transported for community bases in operation greater than one year decreased an estimated 375 transports, or 3%. Weather cancellations for these same bases increased by an estimated 59 transports compared with the prior-year quarter.

Preliminary net revenue per community-based transport for the third quarter 2014 was relatively unchanged at $11,972, as compared with $11,988 in the prior-year quarter. Net revenue per transport did not increase with price increases due to a decrease in privately insured patients as a percentage of transports, as well as a decrease in collections as a percentage of gross charges from private insurers. Transports of privately insured patients decreased from 34.2% to 32.6% of total transports during the third quarter, compared with the prior-year quarter. Collections as a percentage of gross charges from private insurers decreased from 74.6% in the prior-year quarter, to 73.5% in current-year quarter.

Primarily as a result of these factors, the Company expects to report net income of approximately $0.83 to $0.87 per share for the third quarter of 2014, compared with net income of $0.91 per share in the prior-year quarter. The Company stated that these preliminary results are subject to final quarter-end closing and review procedures and are therefore subject to change.

*** The Street sees Q3 revenue of $285 million and EPS of $1.09.

Aaron Todd, CEO, stated, "Quarterly fluctuations in flight volumes and net reimbursement per transport are not unusual for Air Methods; having both of these factors reflecting weakness in a third quarter is less typical. Air Methods has instituted a supplemental price increase of 3% effective October 1st to help offset these variables moving forward."

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