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Select Medical (SEM) Lags Q4 Earnings, Keeps 2017 Guidance
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Select Medical Holdings Corp. (SEM - Free Report) reported fourth-quarter 2016 earnings of 12 cents per share, which missed the Zacks Consensus Estimate by a couple of cents. Also, earnings declined by a dime from the year-ago level.
In spite of an improvement in revenues, the bottom-line growth was limited by an increase in expenses.
However, share price gained 12.3% in the last couple of trading sessions.
Operational Activities
Operating revenues of Select Medical grossed $1.04 billion during the quarter, up 0.7% year over year. Higher Outpatient Rehabilitation revenues and Concentra revenues drove the upside. The top line was in line with the Zacks Consensus Estimate.
Total operating expenses amounted to $0.9 million, up 1.3% year over year. Increase of 0.8 % in cost of services, 9.1% higher depreciation and amortization expenses, , 6.5% in general and administrative expenses, and 8.5% in bad debt expenses resulted in the overall rise in expenses.
Income from operations declined 10.5% year over year to $0.5 billion on higher expenses.
2016 Highlights
Select Medical delivered earnings per share were 61 cents on revenues of $4.3 million.
Bottom line declined 28% while topline increased 14.5%.
Select Medical Holdings Corporation Price, Consensus and EPS Surprise
Specialty Hospitals’ operating revenues dipped 5.6% year over year to $560.2 million.
Adjusted EBITDA was $63.7 million, down 25.9% year over year, with margins contracting 310 basis points (bps) to 11.4%.
Operating revenues from Outpatient Rehabilitation were up 21.1% year over year to $249.6 million, mainly due to higher number of visits by patients.
Number of visits to clinics surged 55.2% year over year.
Adjusted EBITDA jumped 30.8% year over year to $30.8 million, while margin expanded 90 bps year over year to 12.3%.
Concentra segment reported net operating revenues of $236.4 million, down 1.3% from the prior-year quarter. Adjusted EBITDA soared 116.4% year over year to $24.9 million. Adjusted EBITDA margin expanded 570 bps to 10.5%.
Financial Update
Select Medical exited the 2016 with cash of $99 million, up from $14.4 million at year-end 2015.
As of Dec 31, 2016, long-term debt, net of current portion, increased to $2.7 billion from $2.2 billion at the end of 2015. Cash flow from operations was $346.6 million, up from $208.4 million in 2015.
2017 Guidance
Select Medical reiterated its 2017 outlook. Select Medical estimates earnings per share to be between 73-91 cents on revenues of $4.4 billion to $4.6 billion. Adjusted EBITDA is projected between $540-580 million.
Zacks Rank
Select Medical presently holds a Zacks Rank #5 (Strong Sell).
Performance of Other Health Maintenance Organization Stocks
Among other stocks from the health maintenance organization industry that have reported their fourth-quarter earnings, the bottom lines at Humana Inc. (HUM - Free Report) , Aetna Inc. and UnitedHealth Group Incorporated (UNH - Free Report) beat their respective Zacks Consensus Estimate.
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Select Medical (SEM) Lags Q4 Earnings, Keeps 2017 Guidance
Select Medical Holdings Corp. (SEM - Free Report) reported fourth-quarter 2016 earnings of 12 cents per share, which missed the Zacks Consensus Estimate by a couple of cents. Also, earnings declined by a dime from the year-ago level.
In spite of an improvement in revenues, the bottom-line growth was limited by an increase in expenses.
However, share price gained 12.3% in the last couple of trading sessions.
Operational Activities
Operating revenues of Select Medical grossed $1.04 billion during the quarter, up 0.7% year over year. Higher Outpatient Rehabilitation revenues and Concentra revenues drove the upside. The top line was in line with the Zacks Consensus Estimate.
Total operating expenses amounted to $0.9 million, up 1.3% year over year. Increase of 0.8 % in cost of services, 9.1% higher depreciation and amortization expenses, , 6.5% in general and administrative expenses, and 8.5% in bad debt expenses resulted in the overall rise in expenses.
Income from operations declined 10.5% year over year to $0.5 billion on higher expenses.
2016 Highlights
Select Medical delivered earnings per share were 61 cents on revenues of $4.3 million.
Bottom line declined 28% while topline increased 14.5%.
Select Medical Holdings Corporation Price, Consensus and EPS Surprise
Select Medical Holdings Corporation Price, Consensus and EPS Surprise | Select Medical Holdings Corporation Quote
Segment Update
Specialty Hospitals’ operating revenues dipped 5.6% year over year to $560.2 million.
Adjusted EBITDA was $63.7 million, down 25.9% year over year, with margins contracting 310 basis points (bps) to 11.4%.
Operating revenues from Outpatient Rehabilitation were up 21.1% year over year to $249.6 million, mainly due to higher number of visits by patients.
Number of visits to clinics surged 55.2% year over year.
Adjusted EBITDA jumped 30.8% year over year to $30.8 million, while margin expanded 90 bps year over year to 12.3%.
Concentra segment reported net operating revenues of $236.4 million, down 1.3% from the prior-year quarter. Adjusted EBITDA soared 116.4% year over year to $24.9 million. Adjusted EBITDA margin expanded 570 bps to 10.5%.
Financial Update
Select Medical exited the 2016 with cash of $99 million, up from $14.4 million at year-end 2015.
As of Dec 31, 2016, long-term debt, net of current portion, increased to $2.7 billion from $2.2 billion at the end of 2015. Cash flow from operations was $346.6 million, up from $208.4 million in 2015.
2017 Guidance
Select Medical reiterated its 2017 outlook. Select Medical estimates earnings per share to be between 73-91 cents on revenues of $4.4 billion to $4.6 billion. Adjusted EBITDA is projected between $540-580 million.
Zacks Rank
Select Medical presently holds a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Health Maintenance Organization Stocks
Among other stocks from the health maintenance organization industry that have reported their fourth-quarter earnings, the bottom lines at Humana Inc. (HUM - Free Report) , Aetna Inc. and UnitedHealth Group Incorporated (UNH - Free Report) beat their respective Zacks Consensus Estimate.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>