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Amedisys (AMED) Q3 Earnings Beat, Revenues Miss Estimates
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Amedisys, Inc. (AMED - Free Report) reported adjusted earnings from continuing operations of 56 cents per share in the third quarter of 2017, up 55.6% year over year. Earnings also surpassed the Zacks Consensus Estimate of 54 cents.
Third-quarter net service revenues grossed $380.2 million, up 5.1% year over year. The top line however missed the Zacks Consensus Estimate of $389 million.
Quarter in Detail
Within the company's Home Health division, net service revenues totaled $269.5 million in the third quarter, reflecting a marginal 0.2% improvement year over year. Medicare revenues of $191.4 million declined 6.1% year over year, while non-Medicare revenues improved 20.2% year over year to $78.1 million.
Within the Hospice division, net service revenues grossed $96.5 million (up 17.7% year over year), including Medicare revenues of $91.4 million (up 18.7%) and non-Medicare revenues of $5.1 million (up 2%).
Recently, the company integrated two additional operating segments within its business – Personal Care and Corporate. At Personal Care, net service revenues totaled $14.2 million, reflecting a 32.7% increase from the year-ago number of $10.7 million.
Meanwhile, Corporate did not register any revenue till the end of the third quarter.
The company’s gross margin contracted 95 basis points (bps) to 40.4% in the third quarter despite a 2.7% increase in gross profit. Expense on salaries and benefits inched up 0.1% to $77.1 million. Other expenses dropped 10.5% to $38.2 million. Adjusted operating income of $38.2 million in the reported quarter reflects an increase of 28.2% from the year-ago $29.8 million. Adjusted operating margin expanded 181 bps to 10% from the year-ago figure.
Amedisys exited the third quarter with cash and cash equivalents of $66.1 million, compared with $59.2 million at the end of the preceding quarter. The company's long-term obligations (excluding current portion) were $80.5 million in the reported quarter, down from $83.2 million in the previous quarter. Year-to-date net cash provided by operating activities was $73.5 million, compared with $33.7 million in the year-ago period.
Our Take
Amedisys ended the third quarter on a mixed note. At the Home Health division, the company witnessed a decline in Medicare revenues while there was an improvement in non-Medicare revenues. At Hospice division, the company registered strong growth across all segments. Amedisys is currently exploring opportunities in the Home Health and Hospice segments. A favorable demographic trend and strategic acquisitions bode well for the company.
However, escalating operating expenses and declining gross margin continue to raise concerns. Also, an intense competitive landscape and regulatory concerns continue to pose challenges in the home health and hospice industry.
Zacks Rank & Other Key Picks
Amedisys carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the broader medical sector are PetMed Express, Inc. (PETS - Free Report) , Luminex Corporation and Intuitive Surgical, Inc. (ISRG - Free Report) . Notably, PetMed and Luminex sport a Zacks Rank #1 (Strong Buy), while Intuitive Surgical carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
PetMed reported earnings per share of 43 cents in the second quarter of fiscal 2018, up 79.2% from the year-ago quarter’s 24 cents. Also, gross margin expanded 548 bps year over year to 35.2%.
Luminex reported adjusted earnings per share of 19 cents in the third quarter of 2017, up 216.7% year over year. Revenues increased almost 4.1% year over year to $74.1 million.
Intuitive Surgical posted adjusted earnings of $2.77 per share in the third quarter of 2017, up 34.5% year over year. Also, revenues rose 18% year over year to $806.1 million.
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Amedisys (AMED) Q3 Earnings Beat, Revenues Miss Estimates
Amedisys, Inc. (AMED - Free Report) reported adjusted earnings from continuing operations of 56 cents per share in the third quarter of 2017, up 55.6% year over year. Earnings also surpassed the Zacks Consensus Estimate of 54 cents.
Third-quarter net service revenues grossed $380.2 million, up 5.1% year over year. The top line however missed the Zacks Consensus Estimate of $389 million.
Quarter in Detail
Within the company's Home Health division, net service revenues totaled $269.5 million in the third quarter, reflecting a marginal 0.2% improvement year over year. Medicare revenues of $191.4 million declined 6.1% year over year, while non-Medicare revenues improved 20.2% year over year to $78.1 million.
Amedisys Inc Price, Consensus and EPS Surprise
Amedisys Inc Price, Consensus and EPS Surprise | Amedisys Inc Quote
Within the Hospice division, net service revenues grossed $96.5 million (up 17.7% year over year), including Medicare revenues of $91.4 million (up 18.7%) and non-Medicare revenues of $5.1 million (up 2%).
Recently, the company integrated two additional operating segments within its business – Personal Care and Corporate. At Personal Care, net service revenues totaled $14.2 million, reflecting a 32.7% increase from the year-ago number of $10.7 million.
Meanwhile, Corporate did not register any revenue till the end of the third quarter.
The company’s gross margin contracted 95 basis points (bps) to 40.4% in the third quarter despite a 2.7% increase in gross profit. Expense on salaries and benefits inched up 0.1% to $77.1 million. Other expenses dropped 10.5% to $38.2 million. Adjusted operating income of $38.2 million in the reported quarter reflects an increase of 28.2% from the year-ago $29.8 million. Adjusted operating margin expanded 181 bps to 10% from the year-ago figure.
Amedisys exited the third quarter with cash and cash equivalents of $66.1 million, compared with $59.2 million at the end of the preceding quarter. The company's long-term obligations (excluding current portion) were $80.5 million in the reported quarter, down from $83.2 million in the previous quarter. Year-to-date net cash provided by operating activities was $73.5 million, compared with $33.7 million in the year-ago period.
Our Take
Amedisys ended the third quarter on a mixed note. At the Home Health division, the company witnessed a decline in Medicare revenues while there was an improvement in non-Medicare revenues. At Hospice division, the company registered strong growth across all segments. Amedisys is currently exploring opportunities in the Home Health and Hospice segments. A favorable demographic trend and strategic acquisitions bode well for the company.
However, escalating operating expenses and declining gross margin continue to raise concerns. Also, an intense competitive landscape and regulatory concerns continue to pose challenges in the home health and hospice industry.
Zacks Rank & Other Key Picks
Amedisys carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the broader medical sector are PetMed Express, Inc. (PETS - Free Report) , Luminex Corporation and Intuitive Surgical, Inc. (ISRG - Free Report) . Notably, PetMed and Luminex sport a Zacks Rank #1 (Strong Buy), while Intuitive Surgical carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
PetMed reported earnings per share of 43 cents in the second quarter of fiscal 2018, up 79.2% from the year-ago quarter’s 24 cents. Also, gross margin expanded 548 bps year over year to 35.2%.
Luminex reported adjusted earnings per share of 19 cents in the third quarter of 2017, up 216.7% year over year. Revenues increased almost 4.1% year over year to $74.1 million.
Intuitive Surgical posted adjusted earnings of $2.77 per share in the third quarter of 2017, up 34.5% year over year. Also, revenues rose 18% year over year to $806.1 million.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>