Legg Mason cut its estimates on Amsurg (AMSG), citing the company's earnings guidance.
Analyst Jerry Doctrow cited the company's announcement that third quarter earnings per share would fall 5 cents below its prior estimates, due to lower margins and revenues tied to operating problems at 16 centers that experienced 10% drop in same- store growth. The analyst noted problems at these centers including physician departures, unbudgeted physician vacations, scheduling issues, and lower procedure volume. The analyst thinks the company will have trouble stepping up development activities in 2006, which will be needed to offset subpar results from maturing Ambulatory Surgery Centers parenterships. The analyst cut a previous $1.33 2005 earnings per share estimate to $1.22, and $1.59 2006 estimate to $1.45. The stock recommendation remains at hold.