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Amedisys (AMED) Q1 Earnings Beat Estimates, 2021 View Up

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Amedisys, Inc. (AMED - Free Report) reported adjusted earnings per share (EPS) of $1.54 for first-quarter 2021, up 46.7% from the year-ago figure. The bottom line beat the Zacks Consensus Estimate by 7.7%.

The quarter’s adjustments include certain COVID-related costs as well as benefits from CARES Act & State COVID-19 grants.

GAAP EPS for the first quarter was $1.50, up 56.3% compared with the year-ago 96 cents.

Net service revenues grossed $537.1 million, up 9.2% year over year. The top line missed the Zacks Consensus Estimate by 1.8%.

Segment in Detail

Within the Home Health division, net service revenues totaled $328.6 million in the quarter, reflecting an 8.2% rise year over year. Within this segment, Medicare revenues of $221.4 million improved 8.6% year over year. Non-Medicare revenues increased 7.5% to $107.2 million.

Within the Hospice division, net service revenues were $191.5 million (up 13% year over year), including Medicare revenues of $181.5 million (up 13.1%) and non-Medicare revenues of $10 million (up 12.4%).

Amedisys, Inc. Price, Consensus and EPS Surprise

 

At Personal Care, net service revenues totaled $17 million, reflecting a decline of 9.1% from the year-ago number. The Corporate segment did not register any revenues in the first quarter.

Margins

Gross profit for the company improved 16.5% to $239.9 million in the quarter under review. Gross margin expanded 278 basis points (bps) to 44.7%.

Expenses on salaries and benefits rose 14% to $115.8 million. Other expenses fell 0.3% to $49.1 million. Adjusted operating profit of $75 million reflected a 36% improvement from the year-ago quarter. Adjusted operating margin expanded 275 bps to 13.9% from the prior-year level.

Liquidity and Cash Position

Amedisys exited the first quarter of 2021 with cash and cash equivalents of $77.3 million compared with $81.8 million at the end of fourth-quarter 2020. The company's long-term obligations (excluding the current portion) were $231.4 million at the end of the first quarter compared with $204.5 million at the end of last reported quarter.

Cumulative net cash provided by operating activities at the end of the first quarter was $54 million compared with $288.9 million at the end of fourth-quarter 2020.

2021 Guidance

Amedisys raised its outlook for 2021.

For 2021, the company anticipates net service revenues in the range of $2.30-$2.34 billion compared with the previous guidance of $2.27-$2.31 billion. The Zacks Consensus Estimate for the same is pegged at $2.31 billion.

Adjusted earnings per share are projected in the range of $6.85-$7.07 compared with the prior guidance of $6.25-$6.47. The Zacks Consensus Estimate for the metric is pegged at $6.38.

Our Take

Amid the coronavirus-led volume disruption across the United States, Amedisys ended the first quarter on a mixed note with better-than-expected earnings and a revenue miss.

On a positive note, both Home Health and Hospice divisions registered year-over-year growth. Expansion of both margins looks encouraging as well. The company raised its financial guidance for 2021, projecting year-over-year growth in revenues and earnings. However, the increase in expenses compared to the prior year is a concern.

Zacks Rank and Key Picks

Currently, Amedisys 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) . 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. The company currently sports a Zacks Rank #1.

Owens & Minor 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. The company currently carries a Zacks Rank #2 (Buy).

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. The company currently carries a Zacks Rank #2.

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