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Select Medical (SEM) Q4 Earnings and Revenues Beat Estimates

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Select Medical Holdings Corporation (SEM - Free Report) delivered fourth-quarter 2020 earnings of 57 cents per share, beating the Zacks Consensus Estimate by 137.5%. Moreover, the bottom line soared 84% year over year on the back of improved revenues.

Additionally, net operating revenues were up 6.2% year over year to $1.46 billion owing to solid performances by its Critical Illness Recovery and Rehabilitation Hospital segments. Further, the top line surpassed the Zacks Consensus Estimate by 5.2%.

Total costs and expenses were up 5.6% year over year to $1.33 billion due to higher cost of services.

Adjusted EBITDA increased 28.7% year over year to $221.3 million.

Segment Performance

Critical Illness Recovery Hospital

Operating revenues climbed 18.2% to $537.9 million, courtesy of better patient days. Adjusted EBITDA for the segment jumped 24.5% to $75.3 million.

Rehabilitation Hospital Segment

Operating revenues ascended 7.2% to $195.9 million, led by higher patient days. Adjusted EBITDA was down 2.1% to $42.4 million.

Outpatient Rehabilitation

Operating revenues were down 5.3% to $257.5 million due to less patient visit volume and suspension of elective surgeries.
Adjusted EBITDA of $27.7 million was down 31.1% year over year.

Concentra

Operating revenues inched up 0.4% year over year to $398.7 million but number of visits declined year over year. Adjusted EBITDA increased 22.9% to $69.4 million.

Balance Sheet Position (as of Dec 31, 2020)

The company had $3.4 billion of long-term debt, net of current portion, down 0.9% from the level at 2019 end.

Total equity of $1.25 billion surged 34.9% from the level on Dec 31, 2019.

Total cash and cash equivalents of $577.1 million were up 71.8% from the level as of Dec 31, 2019.

Cash flow provided by operating activities for the full year was $207.4 million, up 16.2% year over year.

Share Repurchase Update

Select Medical did not buy back shares in the fourth quarter.

2021 Outlook

The company expects total revenues in the range of $5.65-$5.85 billion while adjusted EBITDA is expected in the band of $840-$880 million. The company estimates annual adjusted earnings per share within $2.26-$2.48.

The company also provided long-term guidance for the 2021-2023 period. During this time frame, revenues are expected to grow in the 4-6% range. Adjusted EBITDA is projected in the band of 7-8% while diluted earnings per common share are anticipated in the 1720% band.

Zacks Rank and Performance of Other Players

Select Medical carries a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings of other stocks in the same space including Community Health Systems Inc. (CYH - Free Report) , Universal Health Services, Inc. (UHS - Free Report) and HCA Healthcare Inc. (HCA - Free Report) beat their respective estimates by 433.33%, 24.6% and 13.8%, respectively, in the fourth quarter.

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