SAN DIEGO—Shares of health care staffing company AMN Healthcare Services Inc. rose Thursday after posting first-quarter profit that beat Wall Street projections.
Its stock soared $1.16, or 7.6 percent, to end Thursday at $16.41, on more than double average volume.
After the closing bell Wednesday, the company said net income rose to $9.5 million, or 28 cents per share, from $8.2 million, or 23 cents, a year ago.
Revenue climbed 3 percent to $293.6 million from $284 million in the prior-year period.
Analysts polled by Thomson Financial were expecting, on average profit of 25 cents per share on revenue of $293.1 million.
AMN said the quarter's strong results were due to a significant increase in demand for travel nurses, medical assistants and technicians, as well as improved cost and expense management.
The company also said its board of directors approved a $38 million share repurchase plan.
AMN projected a second-quarter profit of between 26 and 28 cents per share on revenue of between $313 million and $316 million. Analysts surveyed by Thomson Financial expect, on average, higher earnings of 29 cents per share on revenue of $306.9 million.
The company also reaffirmed its full-year estimates of revenue growth of 7 to 12 percent over 2007, implying sales of between $1.24 billion and $1.30 billion. The company also forecast earnings growth of 11 to 16 percent, implying between $1.21 and $1.22 per share.
Analysts are expecting 2008 revenue of $1.23 billion on earnings of $1.17 per share.
Citi Investment Research analyst Gary Taylor said that while the strongest flu season since 2005 helped AMN beat estimates, he doesn't see the stock going higher in the short-term because its second-quarter earnings guidance is below consensus and "nurse staffing earnings power has likely peaked for this cycle."
Taylor has a "Sell" rating and a $13 price target.
Stifel Nicolaus & Co analyst James J. Janesky, however, is more bullish on shares with a "Buy" rating and $24 target.
Janesky cited a continued demand for staffing, conservative full-year guidance, and the share buyback as indications that "could lead to 55 percent potential upside from current stock levels."
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