ATLANTA (AP) -- Gentiva will see profits cut substantially this year because of cuts to the Medicare program, the home care and hospice company said Wednesday.
A series of automatic spending cuts, the result of a budget impasse in Washington, will reduce adjusted income from continuing operations by about 60 cents per share, Gentiva said. Annual revenue will be reduced by about $30 million.
For the full year the company expects adjusted income of 90 cents to $1.10 per share from continuing operations and $1.69 billion to $1.73 billion in revenue.
Analysts had been projecting adjusted income of $1.22 per share and $1.71 billion in revenue, according to FactSet.
Shares of Gentiva Health Services Inc. lost 34 cents, or 2.7 percent, to $12.28 in morning trading.
The budget cuts include a reduction in funding for Medicare, the federal program that provides coverage for the elderly and disabled people. Gentiva said it is assuming the cuts will affect its reimbursement for patients whose service ends April 1 or later.
The company also forecasts $21 million in lost revenue because of branches it sold or closed in 2012.
Gentiva reported adjusted income of $37.7 million, or $1.23 per share, from continuing operations in 2012, and its revenue fell 5 percent to $1.71 billion. Its business was hurt by a home health Medicare rate reduction last year and the sale or closure of some branches.