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Shares of Air Methods Corp. (NASDAQ: AIRM) haven't been flying high lately. The air medical-transportation company's acquisition of Tri-State Care Flight took a toll in the second quarter. Air Methods announced its third-quarter results after the market closed on Thursday. Here are the highlights.
Air Methods results: The raw numbers
Data source: Air Methods. YOY = year over year.
What happened this quarter?
The primary problem for Air Methods in the third quarter stemmed from a drop-off in same-base transports. The company reported15,352 same-base transports in the third quarter, a decline of 8.4% compared to the prior-year period.Fewer weather cancellations helped somewhat, but not enough to offset the decline in transports.
Another issue was that flight center and aircraft operations expenses climbed 15.7% year over year to $154.5 million. This contributed to a 3.3% decrease in net revenue per transport compared to the prior year period.
Air Methods'aeromedical and aerospace-technologysegment, United Rotorcraft, also faced headwinds. External revenue in the third quarter plunged 45.9% year over year to $4.5 million.
There was at least one bright spot for the company. The tourism business segment rebounded from a slump in the second quarter. Air Methods reported tourism revenue of$38.8 million, up 7.1% from the prior-year period. That growth stemmed from a 2.6% increase in passengers and a 4.4% bump in total revenue per passenger.
Air Methods also announced that it had "identified an immaterial accounting error" in prior financial statements. This error didn't impact 2016, but the company did make minor adjustments to the balance sheet and income statement for prior periods.
What management had to say
Air Methods CEO Aaron Todd acknowledged the third-quarter disappointment, stating:
Todd also noted some improvement:
As Todd observed, preliminary October numbers show a small improvement in same-base transports. However, weather cancellations during the month offset those gains. The company's tourism segment increased passenger count by 1.1% compared to October 2015.
Those slight gains don't appear to be enough to make a significant impact. Air Methods had previously projected earnings before interest, taxes, depreciation, and amortization (EBITDA) in the mid-$300 million range for full-year 2016. The company now says that "due to the softness in air medical volume," that range isn't achievable.
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Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Air Methods. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.