Matria Mashed Again
Matria (MATR) is turning into a chronic pain for shareholders.
The company, which manages the treatment of long-term illnesses, punished investors Thursday with its second weak forecast in two months. The company slashed its aggressive full-year targets, sending shares down 18%.
Matria maintained its recently lowered second-quarter forecast, but cut full-year revenue guidance to between $337 million and $341 million. Wall Street analysts had been banking on revenue of $361 million. Matria's new full-year profit target of $1.10 to $1.17 share looks to come in at the low end of Wall Street expectations even before stock-option expenses have been subtracted.
Matria blamed a big recent acquisition."The market's reaction to our acquisition of CorSolutions appears to be a general delay in awarding new-employer business to Matria," explained CEO Pete Petit. "Because our acquisition of CorSolutions is currently the largest transaction of this nature to occur in the disease-management market, consultants and prospective clients are being cautious. ... We believe this market pause is temporary, [and] the metrics upon which we acquired CorSolutions are still very compelling." Mainstream analysts originally embraced that acquisition, issuing bullish reports that sent the company's stock rocketing to an all-time peak in February of $45 a share. But short-sellers soon pounced on the stock and triggered a big selloff. The stock now fetches less than it did before the acquisition and, in fact, sits at a new 52-week low. Thus, those who believed in management -- which pointedly dismissed a negative report by Off Wall Street three months ago -- have paid dearly for their faith. "I have been around Wall Street 25 years," BI Research analyst Tom Bishop boasted in a March conference call that Matria held in response to Off Wall Street's first report. "If I had to side with you or Off Wall Street, I think I would side with you."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV