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Chemed's (CHE) Earnings and Revenues Beat Estimates in Q1
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Chemed Corp.’s (CHE - Free Report) first-quarter 2017 adjusted earnings per share (EPS) (considering stock-based compensation expense and related tax benefit as a regular one) were $1.92, as compared to the year-ago adjusted EPS figure of $1.52, up 26.3% year over year. The figure also surpassed the Zacks Consensus Estimate of $1.78.
Including one-time items, the company reported first-quarter net earnings of $1.78 per share, up 22.75% from the year-ago quarter.
Quarter in Details
Revenues in the quarter increased 2.98% year over year to $405.86 million, beating the Zacks Consensus Estimate of $394.10 million.
Chemed currently operates through two wholly-owned subsidiaries, namely, VITAS Healthcare Corporation – a major provider of end-of-life care and Roto-Rooter – a leading commercial and residential plumbing and drain cleaning services provider.
In the first quarter, net revenue at VITAS Healthcare reached $282 million, an increase of 1.7% year over year. The quarter’s revenues were driven by a 1.6% increase in the average net Medicare reimbursement rate and a 3.6% rise in average daily census. However, this was offset by acuity mix shift which impacted revenues by 2.4%. Also, the quarter had one day lesser than the preceding quarter, affecting revenues by 1.1%.
Roto-Rooter reported sales of $123.5 million in the first quarter, up 9.4% year over year. According to the company, revenues from water restoration increased 45.1% year over year to $18.1 million.
Gross margin expanded 107 basis points (bps) year over year to 29.76%. Adjusted operating margin contracted 94 bps to 12.64% in the quarter on a 17.8% rise in selling, general and administrative expenses to $69.5 million.
Chemed exited the first quarter of 2017 with total cash and cash equivalents of $47.0 million, a sharp increase from $15.2 million at the end of 2016. The company had total debt of $146.9 million at the end of the first quarter, compared with $144.9 million at 2016-end. As of Mar 31, 2017, the company had approximately $246 million of undrawn borrowing capacity under its existing five-year credit agreement.
During the first quarter, the company repurchased shares worth $54.3 million. The board has authorized an additional 100 million for stock repurchase under Chemed’s existing share repurchase plan. As of Mar 31, 2017, the company had $95.9 million of remaining share repurchase authorization under this plan.
2017 Outlook
VITAS Healthcare revenue growth is estimated in the range of 4% to 5% prior to the Medicare Cap. Also, the admissions and Average Daily Census in 2017 is expected to increase in the band of 3% to 4%. Medicare Cap billing limitations are expected at around $3.7 million in 2017.
Roto-Rooter business is estimated to grow 3% to 4% in 2017 on job pricing increase of 2% and water restoration services growth.
Full-year adjusted earnings per share are likely to grow $7.80 to $8.00 as compared to Chemed’s adjusted earnings per share of $7.24reported in 2016.
Our Take
We are encouraged by Chemed’s better-than-expected revenue performance in the first quarter. Although VITAS healthcare posted a sluggish quarter, the improvement in average net Medicare reimbursement rate and increase in average daily census are heartening. Also, the strong bottom-line projections raise hope.
However, reimbursement-related issues, seasonality in business, a competitive landscape and dependence on government mandate continue to be challenges for Chemed.
Zacks Rank & Other Key Picks
Chemed currently has a Zacks Rank #2 (Buy). Other top-ranked medical stocks include Hologic, Inc. (HOLX - Free Report) , Heska Corporation and Progenics Pharmaceuticals, Inc. . Hologic, Heska and Progenics Pharmaceuticals sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hologic gained over 31.49% in the last one year, compared with the S&P 500’s gain of 15.0%. The company has a stellar four-quarter average earnings surprise of over 4.16%.
Heska surged over 253.25% in the last one year, compared with the S&P 500. It has a four-quarter average earnings surprise of 291.54%.
Progenics Pharmaceuticals gained 43.09% in the past one year, better than the S&P 500 mark. The company has a stellar four-quarter average earnings surprise of over 8.45%.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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Chemed's (CHE) Earnings and Revenues Beat Estimates in Q1
Chemed Corp.’s (CHE - Free Report) first-quarter 2017 adjusted earnings per share (EPS) (considering stock-based compensation expense and related tax benefit as a regular one) were $1.92, as compared to the year-ago adjusted EPS figure of $1.52, up 26.3% year over year. The figure also surpassed the Zacks Consensus Estimate of $1.78.
Including one-time items, the company reported first-quarter net earnings of $1.78 per share, up 22.75% from the year-ago quarter.
Quarter in Details
Revenues in the quarter increased 2.98% year over year to $405.86 million, beating the Zacks Consensus Estimate of $394.10 million.
Chemed currently operates through two wholly-owned subsidiaries, namely, VITAS Healthcare Corporation – a major provider of end-of-life care and Roto-Rooter – a leading commercial and residential plumbing and drain cleaning services provider.
Chemed Corp. Price, Consensus and EPS Surprise
Chemed Corp. Price, Consensus and EPS Surprise | Chemed Corp. Quote
In the first quarter, net revenue at VITAS Healthcare reached $282 million, an increase of 1.7% year over year. The quarter’s revenues were driven by a 1.6% increase in the average net Medicare reimbursement rate and a 3.6% rise in average daily census. However, this was offset by acuity mix shift which impacted revenues by 2.4%. Also, the quarter had one day lesser than the preceding quarter, affecting revenues by 1.1%.
Roto-Rooter reported sales of $123.5 million in the first quarter, up 9.4% year over year. According to the company, revenues from water restoration increased 45.1% year over year to $18.1 million.
Gross margin expanded 107 basis points (bps) year over year to 29.76%. Adjusted operating margin contracted 94 bps to 12.64% in the quarter on a 17.8% rise in selling, general and administrative expenses to $69.5 million.
Chemed exited the first quarter of 2017 with total cash and cash equivalents of $47.0 million, a sharp increase from $15.2 million at the end of 2016. The company had total debt of $146.9 million at the end of the first quarter, compared with $144.9 million at 2016-end. As of Mar 31, 2017, the company had approximately $246 million of undrawn borrowing capacity under its existing five-year credit agreement.
During the first quarter, the company repurchased shares worth $54.3 million. The board has authorized an additional 100 million for stock repurchase under Chemed’s existing share repurchase plan. As of Mar 31, 2017, the company had $95.9 million of remaining share repurchase authorization under this plan.
2017 Outlook
VITAS Healthcare revenue growth is estimated in the range of 4% to 5% prior to the Medicare Cap. Also, the admissions and Average Daily Census in 2017 is expected to increase in the band of 3% to 4%. Medicare Cap billing limitations are expected at around $3.7 million in 2017.
Roto-Rooter business is estimated to grow 3% to 4% in 2017 on job pricing increase of 2% and water restoration services growth.
Full-year adjusted earnings per share are likely to grow $7.80 to $8.00 as compared to Chemed’s adjusted earnings per share of $7.24reported in 2016.
Our Take
We are encouraged by Chemed’s better-than-expected revenue performance in the first quarter. Although VITAS healthcare posted a sluggish quarter, the improvement in average net Medicare reimbursement rate and increase in average daily census are heartening. Also, the strong bottom-line projections raise hope.
However, reimbursement-related issues, seasonality in business, a competitive landscape and dependence on government mandate continue to be challenges for Chemed.
Zacks Rank & Other Key Picks
Chemed currently has a Zacks Rank #2 (Buy). Other top-ranked medical stocks include Hologic, Inc. (HOLX - Free Report) , Heska Corporation and Progenics Pharmaceuticals, Inc. . Hologic, Heska and Progenics Pharmaceuticals sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hologic gained over 31.49% in the last one year, compared with the S&P 500’s gain of 15.0%. The company has a stellar four-quarter average earnings surprise of over 4.16%.
Heska surged over 253.25% in the last one year, compared with the S&P 500. It has a four-quarter average earnings surprise of 291.54%.
Progenics Pharmaceuticals gained 43.09% in the past one year, better than the S&P 500 mark. The company has a stellar four-quarter average earnings surprise of over 8.45%.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>