Accretive Health shares tumble after company delays results
(Reuters) - Shares of Accretive Health Inc AH.N fell as much as 30 percent on Wednesday as the medical billing services provider withdrew its forecast and indefinitely delayed the filing of its fourth-quarter results, saying it was evaluating the timing of revenue recognition.
The company, which has faced allegations of improper billing of patients, said in a statement on Tuesday it may restate financial results for previous periods if it determines it needs to change the manner in which it recognizes revenue.
Eric Coldwell, an analyst at Robert W. Baird & Co. said he was not surprised by the fall in its share price because there was lack of information on what was going on.
"The company's gone radio silent, so we don't know the complete extent of what they're reviewing and what the outcome may be. It's a riskier situation," he said.
Accretive exited its operations in Minnesota last year after settling a lawsuit with the state, where it was accused of violating health privacy laws through aggressive collection tactics in the state. The company also lost an important customer, Fairview Health Services, due to the lawsuit.
Accretive's stock has halved since the Minnesota allegations went public, causing further public scrutiny of the company's debt collection practices.
A few members of the U.S. House of Representatives sought internal documents last April on the company's operations and debt collection practices.
Analyst Coldwell said the revenue recognition issues could result in a modest-to-moderate reduction in Accretive's future earnings, but that would be followed by a similar or higher growth in the future.
The company, which was scheduled to report fourth-quarter results on Wednesday, disclosed that it ended 2012 with no debt and about $177 million in cash and cash equivalents.
Analysts on average expect the Chicago-based company to report earnings of about 9 cents per share on revenue of $237.2 million, according to Thomson Reuters I/B/E/S.
Accretive's shares were down 25 percent at $9.00 on the Nasdaq.
(Reporting by Zeba Siddiqui in Bangalore; Editing by Sreejiraj Eluvangal)
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