Odyssey Healthcare, Inc.

Company Description

Odyssey Healthcare, Inc. one of the largest providers of hospice care in the United States. Hospice services focus on palliative care for patients with life-limiting illnesses, which is care directed at managing pain and other discomforting symptoms and addressing the psychosocial and spiritual needs of patients and their families.

Crushed Estimates

Odyssey reported first-quarter results on Apr 29 that took analysts by surprise. The company reported earnings per share of 26 cents, well above the 20 cents Wall Street expected. This was the hospice provider's second surprise in the past 4 quarters.

Net income, of $8.7 million, was nearly 6 times higher than the previous year, just $1.5 million. Odyssey's CEO, Robert Lefton, credited higher admissions and patient diversity as a driver for the successful quarter.

Another Acquisition

Odyssey expanded into Michigan through a deal to acquire Avalon Hospice program, however it is not expected to have a significant impact on 2009 earnings.

The March 2008 acquisition of VistaCare, Inc. is starting to show in earnings for 2009. One month of the VistaCare's earnings have gone toward the previously mentioned quarterly-results and all operations will contribute to the parent company from now on.

Explosive Growth

While analysts have not submitted updated estimate revisions the company is still showing excellent growth projections. Estimates for full-year 2009 are up 12 cents to 86 cents over the past 3 months.

The consensus for 2010 is now 98 cents, up from 91 cents. These marks would yield year-over-year earnings growth of 45% and 15% for 2009 and 2010, respectively.

The Chart

I hate to be a bottom caller, but as you can see below the full-year consensus estimates could be forming an rounded bottom and start heading higher. If this trend continues, look for the previously struggling hospice provider to post more excellent quarters in the future.