We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Chemed (CHE) Q1 Earnings Beat Estimates, Gross Margin Up
Read MoreHide Full Article
Chemed Corporation (CHE - Free Report) reported first-quarter 2021 adjusted earnings per share (EPS) of $4.44, up 20.7% year over year. The figure surpassed the Zacks Consensus Estimate by 5.7%.
The company’s GAAP EPS was $4.01, highlighting an 18.6% improvement year over year.
Revenues in Detail
Revenues in the reported quarter improved 2.2% year over year to $527.4 million. The metric surpassed the Zacks Consensus Estimate by 2%.
Segmental Details
Chemed operates through two wholly-owned subsidiaries — VITAS (a major provider of end-of-life care) and Roto-Rooter (a leading commercial and residential plumbing plus drain cleaning service provider).
In the first quarter, net revenues at VITAS totaled $316 million, down 6.5% year over year. This revenue decline was primarily led by a 7.1% decline in days-of-care, a geographically weighted average Medicare reimbursement rate increase (including the suspension of sequestration on May 1, 2020) of approximately 2.8% and an acuity mix shift that reduced the blended average Medicare rate by approximately 50 basis points (bps).
Roto-Rooter reported sales of $212 million in the first quarter, up 18.9% year over year.
Total Roto-Rooter branch commercial revenues declined 8.4% on a 5.8% fall in drain cleaning revenues, 5% decline in commercial plumbing, 19.5% decrease in excavation revenues and an 8.8% increase in commercial water restoration revenues.
Chemed Corporation Price, Consensus and EPS Surprise
Total Roto-Rooter branch residential revenues registered growth of 32% on a 29.5% rise in residential drain cleaning revenues, 34.9% improvement in plumbing, 35.8% increase in excavation and 28.7% growth in residential water restoration.
Margin in Detail
Gross profit rose 13.9% year over year to $186.9 million in the first quarter of 2021. Gross margin expanded 363 bps year over year to 35.4%, while the cost of products and services declined 3.2% in the first quarter of 2021.
Adjusted operating profit increased 1.9% from the year-ago period to $95.3 million. Adjusted operating margin contracted 5 bps to 18.1% with a 29.8% rise in adjusted operating expenses.
Liquidity & Capital Structure
Chemed exited the first quarter of 2021 with cash and cash equivalents of $210 million, marking an improvement from $162.7 million at the end of the last reported quarter. Similar to fourth-quarter 2020, there was no long-term debt at the end of first-quarter 2021.
First-quarter net cash provided by operating activities was $106.7 million compared with $89.3 million a year ago.
In the first quarter, Chemed’s management repurchased stocks for $44.8 million. As of Mar 31, 2021, there was approximately $134 million of share repurchase remaining under the existing plan.
Guidance 2021
Management is likely to provide the updated 2021 earnings guidance in July along with the second-quarter earnings release.
Our Take
Chemed ended the first quarter of 2021 with better-than-expected earnings and revenues. The figures improved year over year. Solid revenue growth across Roto-Rooter is encouraging, given the challenging business environment. Expansion of gross margins buoys optimism. Chemed exited the first quarter of 2021 will no long-term debt, which is again a positive.
On the flip side, a decline in VITAS revenues during the reported quarter was discouraging. Rising operating expenses and contraction of operating margin are concerns. Reimbursement hampering top-line growth, business seasonality and a tough competitive landscape are other headwinds.
Semler is expected to release results on May 3. The Zacks Consensus Estimate for the company’s first-quarter 2021 adjusted EPS is currently pegged at 48 cents. The consensus mark for first-quarter revenues stands at $11.9 million.
Owens & Minor and is scheduled to release results on May 5. The Zacks Consensus Estimate for its first-quarter 2021 adjusted EPS is currently pegged at 97 cents. The consensus estimate for first-quarter revenues stands at $2.29 billion.
DENTSPLY SIRONA is slated to release results on May 6. The Zacks Consensus Estimate for first-quarter 2021 adjusted EPS is currently pegged at 55 cents. The consensus estimate for revenues stands at $929.3 million.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Chemed (CHE) Q1 Earnings Beat Estimates, Gross Margin Up
Chemed Corporation (CHE - Free Report) reported first-quarter 2021 adjusted earnings per share (EPS) of $4.44, up 20.7% year over year. The figure surpassed the Zacks Consensus Estimate by 5.7%.
The company’s GAAP EPS was $4.01, highlighting an 18.6% improvement year over year.
Revenues in Detail
Revenues in the reported quarter improved 2.2% year over year to $527.4 million. The metric surpassed the Zacks Consensus Estimate by 2%.
Segmental Details
Chemed operates through two wholly-owned subsidiaries — VITAS (a major provider of end-of-life care) and Roto-Rooter (a leading commercial and residential plumbing plus drain cleaning service provider).
In the first quarter, net revenues at VITAS totaled $316 million, down 6.5% year over year. This revenue decline was primarily led by a 7.1% decline in days-of-care, a geographically weighted average Medicare reimbursement rate increase (including the suspension of sequestration on May 1, 2020) of approximately 2.8% and an acuity mix shift that reduced the blended average Medicare rate by approximately 50 basis points (bps).
Roto-Rooter reported sales of $212 million in the first quarter, up 18.9% year over year.
Total Roto-Rooter branch commercial revenues declined 8.4% on a 5.8% fall in drain cleaning revenues, 5% decline in commercial plumbing, 19.5% decrease in excavation revenues and an 8.8% increase in commercial water restoration revenues.
Chemed Corporation Price, Consensus and EPS Surprise
Chemed Corporation price-consensus-eps-surprise-chart | Chemed Corporation Quote
Total Roto-Rooter branch residential revenues registered growth of 32% on a 29.5% rise in residential drain cleaning revenues, 34.9% improvement in plumbing, 35.8% increase in excavation and 28.7% growth in residential water restoration.
Margin in Detail
Gross profit rose 13.9% year over year to $186.9 million in the first quarter of 2021. Gross margin expanded 363 bps year over year to 35.4%, while the cost of products and services declined 3.2% in the first quarter of 2021.
Adjusted operating profit increased 1.9% from the year-ago period to $95.3 million. Adjusted operating margin contracted 5 bps to 18.1% with a 29.8% rise in adjusted operating expenses.
Liquidity & Capital Structure
Chemed exited the first quarter of 2021 with cash and cash equivalents of $210 million, marking an improvement from $162.7 million at the end of the last reported quarter. Similar to fourth-quarter 2020, there was no long-term debt at the end of first-quarter 2021.
First-quarter net cash provided by operating activities was $106.7 million compared with $89.3 million a year ago.
In the first quarter, Chemed’s management repurchased stocks for $44.8 million. As of Mar 31, 2021, there was approximately $134 million of share repurchase remaining under the existing plan.
Guidance 2021
Management is likely to provide the updated 2021 earnings guidance in July along with the second-quarter earnings release.
Our Take
Chemed ended the first quarter of 2021 with better-than-expected earnings and revenues. The figures improved year over year. Solid revenue growth across Roto-Rooter is encouraging, given the challenging business environment. Expansion of gross margins buoys optimism. Chemed exited the first quarter of 2021 will no long-term debt, which is again a positive.
On the flip side, a decline in VITAS revenues during the reported quarter was discouraging. Rising operating expenses and contraction of operating margin are concerns. Reimbursement hampering top-line growth, business seasonality and a tough competitive landscape are other headwinds.
Zacks Rank & Key Picks
Currently, Chemed carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space include Semler Scientific Inc. , Owens & Minor, Inc. (OMI - Free Report) and DENTSPLY SIRONA Inc. (XRAY - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Semler is expected to release results on May 3. The Zacks Consensus Estimate for the company’s first-quarter 2021 adjusted EPS is currently pegged at 48 cents. The consensus mark for first-quarter revenues stands at $11.9 million.
Owens & Minor and is scheduled to release results on May 5. The Zacks Consensus Estimate for its first-quarter 2021 adjusted EPS is currently pegged at 97 cents. The consensus estimate for first-quarter revenues stands at $2.29 billion.
DENTSPLY SIRONA is slated to release results on May 6. The Zacks Consensus Estimate for first-quarter 2021 adjusted EPS is currently pegged at 55 cents. The consensus estimate for revenues stands at $929.3 million.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>