What happened
Share of Brookdale Senior Living(NYSE: BKD) were skyrocketing 29.5% as of 11:04 a.m. ET on Tuesday. The big gain came after the operator of senior living communities gave a surprisingly positive update to its first-quarter expectations based on preliminary, unaudited results.
Brookdale said that it now expects revenue per available room (RevPAR) will increase by around 12.9% in the first quarter of 2023. Its previous guidance was for RevPAR growth of between 11% and 12%.
The company projects that first-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) will be "meaningfully above the previously issued guidance range" of $70 million to $75 million. Brookdale stated that total revenue and other operating income should be higher than previous expectations as well. The better-than-expected RevPAR growth is the main driving factor behind this more-positive outlook.
The company also reported weighted average occupancy of 76.1% in March. This was well above the 73.6% occupancy in the prior-year period. It marked Brookdale's 17th consecutive month of year-over-year weighted average occupancy growth.
So what
Investors were justifiably pleased with Brookdale's sneak peek at its first-quarter results. The improvement appears to show that the company has largely moved past the headwinds related to the pandemic.
The good news shouldn't have come as a total surprise, though. CEO Lucinda Baier noted earlier this year that the company saw "stronger-than-expected move-in results" in January.
Now what
Brookdale is scheduled to announce its official first-quarter results after the market closes on May 8. The company plans to hold its quarterly conference call the following morning.
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