In what could be an ominous sign for the home care industry, Aveanna Healthcare Holdings warned Tuesday it will report weaker-than-expected second-quarter earnings. The company will not officially report earnings until Aug. 10, but it said in a statement the ongoing workforce shortage and upward wage pressures continue to challenge operations.
“While we anticipate continued reimbursement rate increases during the second half of 2022, a meaningful portion of which will be passed through to caregivers in an effort to increase available clinical labor, our revised outlook assumes that the current labor market pressures will persist for the remainder of the year,” the statement said.
Aveanna’s forecast adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter, which ends July 31, will be in the range of $36 million to $39 million. That compares to $38 million in the first quarter. The company also issued updated guidance for the full year. It anticipates that revenues will total around $1.79 million compared to earlier guidance of $1.89 million to $1.92 million.
When the company reported first quarter earnings in May, Aveanna CEO Tony Strange struck an optimistic tone, assuring investors the company was turning a corner in the COVID-19 pandemic.
“Although we continue to face near-term caregiver supply constraints like many other healthcare providers, we have moved past the near-term impact from omicron and, importantly, the demand for our services has never been higher, and we remain optimistic about Aveanna’s long-term prospects,” Strange said at that time.
Aveanna, which went public in 2021, provides private duty, home health and hospice services to more than 40,000 clients in 33 states. Like its competitors, the company faces inflationary pressures and other headwinds going into 2023. The Centers for Medicare & Medicaid Services proposed a 6.9% Medicare payment cut for home health next year and a 2.7% payment increase for hospice services, which is likely to be reduced significantly due to sequestration.
