Core Insights - DaVita Inc's shares experienced a significant decline, losing 11.1% by market close, with an intraday drop of 15.2% [1] - The company's Q4 2024 earnings report showed positive earnings per share (EPS) of $2.24, exceeding analyst estimates of $2.13, with sales of $3.3 billion, surpassing Wall Street targets [2] - However, the company's guidance for 2025 was weaker than expected, projecting EPS between $10.20 and $11.30, below the consensus estimate of $11.24, indicating elevated uncertainty [3] - DaVita reported elevated mortality and mistreatment rates, which could hinder new patient growth [4] - The decline in share price was also influenced by Berkshire Hathaway reducing its stake in DaVita, selling over 200,000 shares while still holding 45% [5]

Core Viewpoint - DaVita Inc.'s stock experienced a significant decline of 13.5% following Berkshire Hathaway's decision to reduce its stake in the kidney dialysis provider [1] Group 1: Stock Performance - DaVita's stock (DVA) is on track for its largest one-day selloff in a year and a half, marking a notable downturn in its recent performance [1] - The stock has fallen for three out of the past five days, indicating a troubling trend [1] - The last comparable decline occurred on October 11, 2023, when the stock closed down 16.9% [1]

Group 1 - Warren Buffett, the CEO of Berkshire Hathaway, has achieved a net worth of approximately $142 billion by consistently outperforming the markets through a careful investment approach [1] - Buffett focuses on long-term investments in high-quality businesses with enduring competitive advantages, emphasizing value investing by assessing stocks based on attractive pricing relative to earnings and revenue estimates [2] - Recently, Buffett and Berkshire have been net sellers, liquidating positions more than acquiring new stocks [3] Group 2 - On February 11, Buffett sold 203,091 shares of DaVita Inc at an average price of $156.01, totaling approximately $31.68 million, and this sale was not prearranged [6] - Following the sale, Berkshire continues to hold about 35.89 million shares of DaVita, representing a roughly 45% stake in the company [7] - The sale was influenced by a share repurchase agreement from April 2004, which requires Berkshire to sell shares if its stake exceeds 45%, indicating that the sale does not reflect a bearish outlook on DaVita [9]

Core Viewpoint - DaVita's shares declined significantly following a weak profit outlook for 2025, attributed to rising patient care costs and center closure expenses, while Berkshire Hathaway reduced its stake in the company [1][2]. Group 1: Financial Performance - DaVita's adjusted profit per share for 2025 is projected to be between $10.20 and $11.30, falling short of analysts' average expectation of $11.24 per share [2]. - The company's fourth quarter earnings were reported at $2.24 per share on an adjusted basis, exceeding analysts' estimates of $2.13 per share [3]. Group 2: Cost Factors - The disappointing guidance is linked to increasing patient care costs, which include expenses related to the closure of dialysis centers and health benefits [2]. - In the fourth quarter, DaVita incurred charges totaling $24.2 million due to the closure of its dialysis centers in the U.S. [2].

Financial Performance and Key Metrics Changes - In 2024, the company achieved adjusted operating income of $1.98 billion, with a year-over-year growth of 21% and adjusted EPS growth of 26% [7][20] - Fourth quarter adjusted operating income was $491 million, and adjusted EPS for the quarter was $2.24, bringing full-year adjusted EPS to $9.68 [20][34] - Free cash flow for the fourth quarter was $281 million, totaling $1.16 billion for the full year [20] Business Line Performance and Key Metrics Changes - The U.S. treatment volume increased by 30 basis points year-over-year, but treatments per day declined by 80 basis points [21] - For the full year, treatment growth was 47 basis points, slightly below expectations [22] - Adjusted international operating income declined by $17 million due to a $19 million reserve against aged accounts receivable in Brazil [25][26] Market Performance and Key Metrics Changes - The company expanded its international presence and closed three of four acquisitions in Latin America, with Brazil expected to close midyear 2025 [10][26] - Integrated Kidney Care (IKC) ended 2024 with an adjusted operating loss of $35 million, but results were in line with expectations [11][27] Company Strategy and Industry Competition - The company aims to improve health outcomes and quality of life for patients while minimizing avoidable medical expenses and managing G&A costs tightly [12] - The strategy includes pursuing capital-efficient growth opportunities and returning excess capital to shareholders through share repurchases [19][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering adjusted operating income growth in the target range of 3% to 7% for the coming years, despite uncertainties in treatment volume growth [18][19] - The company anticipates flat treatment volume growth in 2025, with expectations of a return to a 2% growth trend in the future [18][29] Other Important Information - The company expects adjusted operating income guidance for 2025 to be between $2.01 billion and $2.16 billion, representing a midpoint growth of 5.2% [17][28] - The anticipated adjusted EPS for 2025 is between $10.20 and $11.30, driven primarily by adjusted operating income growth and share count reduction due to share repurchases [34] Q&A Session Summary Question: What is the volume outlook for 2025? - Management indicated that the midpoint for volume growth is flat, with variability in admissions, mortality, and mistreatment rates being factors [39][50] Question: Can you clarify the range for the impact of oral drugs in the bundle? - Management explained that the wide range is due to variables such as mix, volume, and adherence, which are still being assessed [54][56] Question: What is the expectation for patient treatment costs? - Management expects patient care costs to grow by approximately 6% to 7% year-over-year, with phosphate binders being a significant driver [30][62] Question: How does the company view the impact of SGLT2 inhibitors on treatment volumes? - Management believes that the impact of SGLT2 inhibitors on their patient population is unlikely, based on data from CMS [79][80] Question: What is the outlook for Integrated Kidney Care (IKC)? - Management expects IKC to remain flat year-over-year in adjusted operating income, with a focus on driving margin rather than volume growth [33][165] Question: Can you provide details on the reserve in Brazil? - The $19 million reserve was related to aged accounts receivable and impacted operating income, but it does not affect the underlying earning power of the international business [194][195]

DaVita HealthCare (DVA) came out with quarterly earnings of $2.24 per share, beating the Zacks Consensus Estimate of $2.21 per share. This compares to earnings of $1.87 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 1.36%. A quarter ago, it was expected that this kidney dialysis provider would post earnings of $2.76 per share when it actually produced earnings of $2.59, delivering a surprise of -6.16%.Over the last four quart ...

International Operations - As of December 31, 2024, the company operated 509 outpatient dialysis centers in 13 countries, serving approximately 80,300 patients[76] - The international dialysis operations have shown steady growth due to acquisitions and development of outpatient dialysis centers in strategic markets[76] - The international outpatient dialysis centers are distributed across various countries, with Brazil having the highest number at 100 centers[78] - The company continues to expand its international dialysis operations, facing competition for acquisition targets and physician relationships in new markets[136] Regulatory Compliance - The company faces a complex regulatory environment, requiring significant resources to monitor compliance with federal, state, and international laws[80] - Delays in obtaining Medicare certifications have been experienced, although recent changes have helped mitigate some of these delays[86] - The company’s dialysis centers are certified by CMS and must comply with various state licensing requirements to operate[83] - Violations of the federal Anti-Kickback Statute and Stark Law could lead to severe penalties, including exclusion from Medicare and Medicaid programs[90][95] - The federal government has prosecuted various alleged false claims and fraud against Medicare and state healthcare programs, including billing for services not rendered and coding errors[103] - The company may face criminal, civil, or administrative sanctions if found in violation of state fraud and abuse laws, including potential exclusion from Medicaid and other healthcare programs[104] - Violations of the corporate practice of medicine and fee-splitting laws may result in disciplinary action against physicians and forfeiture of revenues from payors[107] - The Civil Monetary Penalties Statute allows for substantial penalties, including assessments of up to three times the total amount claimed for each item or service[108] - The Foreign Corrupt Practices Act prohibits improper payments to foreign officials, with violations potentially resulting in fines and adverse impacts on business practices[109] - The Health Insurance Portability and Accountability Act (HIPAA) requires the implementation of safeguards to protect patient health information, with penalties for non-compliance[110] - The company must comply with evolving privacy and data protection laws, including the GDPR, which can impose fines of up to 4% of worldwide turnover or €20 million[117] - The California Consumer Privacy Act (CCPA) and other state laws provide expanded privacy protections, potentially leading to increased compliance costs and legal risks[119] - The evolving healthcare regulatory landscape, including potential changes to the ACA, poses significant uncertainty for the company's operations[126] Financial Performance and Risks - Corporate administrative support costs include labor, benefits, and professional fees, impacting the consolidated general and administrative expenses[79] - The company has invested substantial resources in CMMI payment models aimed at improving kidney care and reducing expenditures, with the ETC mandatory payment model launched in 30% of dialysis clinics[123] - The company is highly sensitive to the percentage of patients with higher-paying commercial health insurance, with potential adverse impacts from legislative changes affecting premium tax credits[124] - The 21 Century Cures Act has increased the percentage of patients on Medicare Advantage plans compared to Medicare Part B plans, broadening access to enhanced benefits[127] - Recent price transparency regulations require health plans to publish negotiated rates and out-of-pocket costs for services, impacting operational transparency[128] - The implementation of California's AB 290, which limits reimbursement for certain services, could materially impact the company's financial condition[131] - A hypothetical increase in interest rates of 100 basis points could reduce net income by approximately $4.2 million, $4.8 million, and $21.4 million for the years ended December 31, 2024, 2023, and 2022, respectively[432] - The company is primarily self-insured for various liabilities, which may expose it to risks if future claims exceed coverage[139] Workforce and Diversity - As of December 31, 2024, the company employed approximately 76,000 teammates, with about 75% located in the U.S., highlighting its workforce scale[142] - As of December 31, 2024, 84% of U.S. teammates feel a sense of belonging within the DaVita community[147] - DaVita's workforce in the U.S. is composed of 78% women and 58% people of color, with 73% of managers and 62% of directors being women[148] - Approximately 58% of U.S. managers were promoted from within in 2024, reflecting the company's commitment to internal career development[153] - The company has 2,400 teammates currently enrolled in the Bridge to Your Dreams program, which supports high-performing individuals pursuing nursing degrees[152] - DaVita's total rewards program includes financial wellness elements such as a 401(k) match and employee stock purchase plan (ESPP)[156] - DaVita's Board is composed of 40% women and 20% people of color, indicating a commitment to diversity at the leadership level[148] - The company has implemented a structured talent mobility effort to empower teammates to explore alternative career pathways[155] Safety and Compliance Programs - DaVita's safety programs include monthly OSHA and infection control audits to ensure compliance and promote a safe working environment[159] Innovation and Development - The company’s transplant software business, MedSleuth, enhances connectivity among transplant candidates and centers, improving patient outcomes[77] - DaVita Venture Group focuses on innovative products and solutions for kidney disease, identifying opportunities for acquisitions and partnerships in digital health and medical devices[77] Competition - The company faces intense competition in the U.S. dialysis industry from both established providers and new entrants, affecting patient acquisition and retention strategies[135]

Contact: Investor Relations DaVita Inc. ir@davita.com DaVita Inc. 4th Quarter 2024 Results Denver, Colorado, February 13, 2025 — DaVita Inc. (NYSE: DVA) announced financial and operating results for the quarter ended December 31, 2024. "Despite a year with unique hurdles, we finished strong in 2024, producing full year adjusted operating income and adjusted EPS in the top half of our guidance range," said Javier Rodriquez, CEO of DaVita Inc. "As we embark on 2025, when we will be celebrating the 25 annivers ...

DENVER, Feb. 13, 2025 /PRNewswire/ -- DaVita Inc. (NYSE: DVA) announced financial and operating results for the quarter ended December 31, 2024."Despite a year with unique hurdles, we finished strong in 2024, producing full year adjusted operating income and adjusted EPS in the top half of our guidance range," said Javier Rodriquez, CEO of DaVita Inc. "As we embark on 2025, when we will be celebrating the 25th anniversary of DaVita, we look forward to continuing our efforts to improve clinical outcomes, enh ...

DaVita Inc. (DVA) is scheduled to report fourth-quarter 2024 results on Feb. 13, after the closing bell.See the Zacks Earnings Calendar to stay ahead of market-making news.In the last reported quarter, the company’s earnings per share (EPS) of $2.59 lagged the Zacks Consensus Estimate by 6.2%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and missed once, delivering an earnings surprise of 10.6%, on average.For fourth-quarter 2024, the Zacks Conse ...