Chemed reduces earnings outlook, blames recession
Chemed Corp. shares dropped 19 percent to close at $32.75 each after the company missed first-quarter earnings expectations and cut its profit outlook for the year.
Chemed blamed "recessionary pressures" for weaker results in its Roto-Rooter plumbing and drain-cleaning subsidiary. It now expects earnings of $3.05 to $3.20 per share in profits from continuing operations in 2008, down from an earlier forecast of $3.60 to $3.70 per share.
Chemed posted net income of 16.8 million, or 69 cents per share, in the three months ended March 31. That's slightly better than last year's profit of 62 cents per share, but short of the 85 cents that Wall Street analysts were projecting no teletrak payday loans. Sales increased 5.5 percent to $285.3 million for the period.
"The first quarter of 2008 clearly indicates recessionary pressures impacting demand for certain plumbing and drain-cleaning services," said a Chemed press release. "This is evidenced by an 11 percent decline in aggregate call volume tracked in Roto-Rooter's two centralized call centers."
Chemed (NYSE:CHE) is a Cincinnati-based holding company for Roto-Rooter and Vitas Healthcare, a hospice provider.