(Reuters) - Shares of Envision Healthcare Corp EVHC.N plunged by more than a third on Wednesday after the ambulatory surgery services provider gave a disappointing profit forecast for the current quarter.
Uncertainty in the healthcare industry has been exacerbated due to repeated efforts by Republicans to repeal and replace former President Barack Obama’s signature Affordable Care Act.
That, along with sliding patient admissions, has weighed on shares of healthcare services companies.
Envision, late on Tuesday, reported a lower-than-expected third-quarter profit as demand fell due to the impact of the hurricanes in Texas and Florida.
Its fourth-quarter adjusted earnings forecast of 44 cents to 54 cents per share was well below analysts average estimate of 94 cents per share, according to Thomson Reuters I/B/E/S.
Canaccord Genuity called the forecast “alarming,” but said the third-quarter results were expected given the already soft patient volumes in the industry and the recent hurricanes.
Envision, which in August said it would sell its ambulance business to buyout firm KKR & Co (KKR.N) for $2.4 billion, also said it would initiate a review of a broad range of strategic alternatives.
The move comes nearly a year after Envision merged with AmSurg to create a company that would offer services from pre-hospital care to acute, post-acute and outpatient care.
“Given the merger has not even hit its one-year anniversary mark, we frankly find this startling,” Mizuho analyst Ann Hynes said.
Hynes said it was unlikely if private equity firms would be interested in acquiring another physician services company.
Envision’s shares plunged as much as 38 percent to a more-than-four-year-low of $26.56. They were down 33 percent at $28.40 in late afternoon trading.
Reporting by Ankur Banerjee in Bengaluru; Editing by Savio D'Souza