Nighthawk announces buyback

Nighthawk Radiology Holdings Inc. announced Wednesday it will buy back $50 million of its shares in a “Dutch auction” expected to start within the next two weeks.

The news, plus disappointing first-quarter earnings and a lowered outlook for the rest of 2008, dragged Nighthawk shares 10 percent lower in after-hours trading.

Shares had closed up 20 cents at $8.56 before the earnings release. The price fell 87 cents after the market closed.

Coeur d’Alene-based Nighthawk, which provides professional and financial services to more than 750 radiology groups that serve one-quarter of all U.S. hospitals, said revenue for the quarter increased 61 percent to $41.7 million. But expenses almost doubled, to $38.8 million.

Net income was $700,000, or two cents per share, compared with $4.3 million, or 14 cents per share, for the same period in 2007.

Nighthawk said severance costs and fees for recruiting a new chief financial officer trimmed this year’s results.

Analysts had expected net income of 21 cents per share. They had also forecast 2008 revenues of roughly $195 million. The company said it expects revenues between $171 million and $181 million.

Nighthawk shares have plunged in value since the fall, when the price peaked at $25.95. Market capitalization was down to $260 million at yesterday’s close.

In the auction, the company will buy up stock offered at the lowest price, up to $50 million worth.

Dr. Paul Berger, Nighthawk chairman and chief executive officer, said the tender will provide value to shareholders and be a prudent use of company resources.

“We believe we can provide all of our stockholders with the opportunity to tender all or a portion of their shares and to receive a return on some or all of their investment,” he said.