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Envision Healthcare (EVHC) Q2 Earnings Beat, Revenues Miss
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Envision Healthcare Corporation came up with quarterly earnings of 86 cents per share, beating the Zacks Consensus Estimate by 4.9%. This compares to earnings of 79 cents per share a year ago.
Envision Healthcare posted revenues of $2.07 billion, missing the Zacks Consensus Estimate by 1.07% but increasing 6.1% year over year.
Better-than-expected earnings were driven by revenue growth at both the company’s Physicians Services and Ambulatory Services segments.
Envision Healthcare Corporation Price, Consensus and EPS Surprise
Adjusted EBITDA for the second quarter came at $246.7 million, down 2.8% year over year.
Total operating expenses of $3.9 billion increased 122% year over year, due to $2 billion of impairment charges incurred in the quarter compared with nothing incurred in the year-ago quarter.
Strong Segment Performance
Physician Services
Net revenues from the segment were $1.74 billion, reflecting an increase of 7.1% year over year. The revenue growth was driven by 4.7% contribution from acquisitions and 1.2% each from same and new contracts.
Adjusted EBITDA was $182.4 million, down 5.6% year over year. The segment’s results were impacted by higher-than-anticipated malpractice expense related to both settlement of prior-year claims as well as increased accruals for claims related to those same periods.
Ambulatory Services
Net revenues were $328 million, up 3% year over year, led by volume and rate growth.
For the reported quarter, adjusted EBITDA was $64.3 million, up 6.1% year over year.
Financial Update
Envision Healthcare had cash and cash equivalents of $593.5 million, up 90% from the year-end 2017 level.
At Jun 30, 2018, Envision had total debt outstanding of $4.72 billion. The company’s ratio of total net debt to EBIDTA ratio was 4.5 times at the end of second-quarter 2018.
Net cash provided by operating activities was $24.7 million as of Jun 30, 2018, down from $378.8 million as of Jun 30, 2017.
During the quarter, the company invested $69.0 million in acquisitions, and maintenance capital expenditures were $33.5 million.
Business Update
During the quarter, Envision completed four acquisitions, including two physician group practice and two ambulatory services transactions. One of those acquisitions was completed at the end of the second quarter, and was funded early in the third quarter of 2018.
The company has also entered into a definitive agreement to be acquired by investment funds affiliated with the global investment firm KKR in an all-cash transaction, which is expected to be completed during the fourth quarter of 2018.
Among the other firms in the medical sector that have reported second-quarter earnings so far, the bottom line at Centene Corp. (CNC - Free Report) , Aetna Inc. and UnitedHealth Group Inc. (UNH - Free Report) beat their respective Zacks Consensus Estimate.
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Envision Healthcare (EVHC) Q2 Earnings Beat, Revenues Miss
Envision Healthcare Corporation came up with quarterly earnings of 86 cents per share, beating the Zacks Consensus Estimate by 4.9%. This compares to earnings of 79 cents per share a year ago.
Envision Healthcare posted revenues of $2.07 billion, missing the Zacks Consensus Estimate by 1.07% but increasing 6.1% year over year.
Better-than-expected earnings were driven by revenue growth at both the company’s Physicians Services and Ambulatory Services segments.
Envision Healthcare Corporation Price, Consensus and EPS Surprise
Envision Healthcare Corporation Price, Consensus and EPS Surprise | Envision Healthcare Corporation Quote
Adjusted EBITDA for the second quarter came at $246.7 million, down 2.8% year over year.
Total operating expenses of $3.9 billion increased 122% year over year, due to $2 billion of impairment charges incurred in the quarter compared with nothing incurred in the year-ago quarter.
Strong Segment Performance
Physician Services
Net revenues from the segment were $1.74 billion, reflecting an increase of 7.1% year over year. The revenue growth was driven by 4.7% contribution from acquisitions and 1.2% each from same and new contracts.
Adjusted EBITDA was $182.4 million, down 5.6% year over year. The segment’s results were impacted by higher-than-anticipated malpractice expense related to both settlement of prior-year claims as well as increased accruals for claims related to those same periods.
Ambulatory Services
Net revenues were $328 million, up 3% year over year, led by volume and rate growth.
For the reported quarter, adjusted EBITDA was $64.3 million, up 6.1% year over year.
Financial Update
Envision Healthcare had cash and cash equivalents of $593.5 million, up 90% from the year-end 2017 level.
At Jun 30, 2018, Envision had total debt outstanding of $4.72 billion. The company’s ratio of total net debt to EBIDTA ratio was 4.5 times at the end of second-quarter 2018.
Net cash provided by operating activities was $24.7 million as of Jun 30, 2018, down from $378.8 million as of Jun 30, 2017.
During the quarter, the company invested $69.0 million in acquisitions, and maintenance capital expenditures were $33.5 million.
Business Update
During the quarter, Envision completed four acquisitions, including two physician group practice and two ambulatory services transactions. One of those acquisitions was completed at the end of the second quarter, and was funded early in the third quarter of 2018.
The company has also entered into a definitive agreement to be acquired by investment funds affiliated with the global investment firm KKR in an all-cash transaction, which is expected to be completed during the fourth quarter of 2018.
Zacks Rank & Other Releases
Envision Healthcare carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among the other firms in the medical sector that have reported second-quarter earnings so far, the bottom line at Centene Corp. (CNC - Free Report) , Aetna Inc. and UnitedHealth Group Inc. (UNH - Free Report) beat their respective Zacks Consensus Estimate.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>