I haven’t looked into CorVel for some time now, but a tipoff from WorkCompWire got my interest – specifically a passage that read:
Revenues for the quarter ended September 30, 2014 were $124 million, a 4% increase over the $119 million in revenue in the quarter ended September 30, 2013. Earnings per share for the quarter ended September 30, 2014 were $0.37 and were $0.41 for the same quarter of the prior year. [emphases added]
This was pretty much identical to CorVel’s press release. Normally there’s a percentage given for any change over a prior period; that percentage was noticeably missing. A “normal” release would have read:
Earnings per share for the quarter ended September 30, 2014 were $0.37, down 10% from the same quarter of the prior year.
4 cents doesn’t sound like much, but 10 percent sure does. It looks like the primary driver was a much higher cost of revenue, up 6.7 percent over the same quarter, prior year. This isn’t a one-time thing, as CorVel’s cost of revenues increased 6.4 percent over the six months ending 9/30/14.
The stock, currently trading just over $34, is down rather precipitously from it’s 52 week high of $52.44.
The last earnings call transcript available from Seeking Alpha is, to borrow a term from “The Shawshank Redemption”, obtuse. Whether it is the recording, the transcript thereof, or the comments made by Chairperson Gordon Clemons, I wasn’t sure what to make of their strategy, focus, or outlook. Lots of comments about private equity’s involvement in WC, market consolidation, ACA and other matters but little clarity about how this would or would not affect CRVL.
What does this mean for you?
Perhaps we are now starting to see that effect.
