ALI-more from bloomberg post-close. Perhaps 12 1/4- 12 1/2 tomorrow.
Alternative Living Falls on 1st-Qtr Earnings, Warning (Update1)
Alternative Living Falls on 1st-Qtr Earnings, Warning (Update1) (Adds analyst's comments in 6th and 7th paragraphs, closing stock activity.)
Brookfield, Wisconsin, May 5 (Bloomberg) -- Alternative Living Services Inc. fell 46 percent after the No. 1 U.S. operator of assisted-living centers said first-quarter profit was lower than expected and that it will miss 1999 and 2000 estimates as costs at newly opened residences rise.
The company, which provides housing and health-care services for the elderly, fell 10 1/8 to 11 7/8 in trading of 5.64 million shares, 38 times the three-month daily average. The Brookfield, Wisconsin-based company operates or manages 375 residences.
Alternative Living said it earned $6.4 million, or 28 cents a share in the quarter, before charges. That's less than the 31- cent average estimate of analysts surveyed by First Call Corp. Revenue rose 78 percent to $82.9 million from $46.5 million a year earlier.
The company said it's seeking to speed up buyouts of joint venture partners, and expects to absorb a larger percentage of operating losses at newly built residences because of longer lease-up periods, or the time taken to fill the residences. Future financing costs may be higher because of recent developments in real estate financing, the company said.
As a result, 1999 earnings will be $1 to $1.10 a share, and 2000 earnings will be $1.40 to $1.60, Alternative Living said. The company was expected to earn $1.43 in 1999 and $1.90 in 2000, the average estimates of analysts polled by First Call. ''It's not a question of whether they will be able to fill the new residences, it's when they can do it,'' said Robert Mains, an analyst at Advest Group Inc., who downgraded the stock today to ''buy'' from ''strong buy.''
There are little or no barriers to entry in the assisted- living industry, which means competition has increased and all operators, including Alternative Living, will find it may take longer to fill their residences, Mains said. |
