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Amedisys (AMED) Tops Earnings and Revenue Estimates in Q3
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Amedisys, Inc. (AMED - Free Report) reported earnings per share (EPS) of 95 cents in the third quarter of 2018, up 69.6% from the year-ago 56 cents. The bottom line also beat the Zacks Consensus Estimate of 77 cents by 23.4%.
Net service revenues grossed $417.3 million, up 11.7% year over year. Moreover, the top line beat the Zacks Consensus Estimate by 1.7%.
Quarter in Detail
Within the company's Home Health division, net service revenues totaled $294.9 million in the third quarter, reflecting an 11.7% improvement year over year. Medicare revenues of $208 million rose 8.7% year over year while non-Medicare revenues improved 19.5% year over year to $86.9 million.
Within the Hospice division, net service revenues grossed $103.4 million (up 7.8% year over year), including Medicare revenues of $98 million (up 7.2%) and non-Medicare revenues of $5.4 million (up 20%).
Additionally, the company integrated two additional operating segments within its business, namely, Personal Care and Corporate. At Personal Care, net service revenues totaled $19 million, representing a 38.7% surge from the year-ago number. Meanwhile, the Corporate segment did not register any revenue in the third quarter.
Gross margin expanded 100 basis points (bps) to 40.2% in the quarter under review on a 14.5% gain in gross profit. Expense on salaries and benefits rose 3% to $79.4 million. Other expenses rose 5.5% to $40.3 million. Adjusted operating income of $47.9 million in the reported quarter reflects a 54% rise from the year-ago tally. Adjusted operating margin expanded 320 bps to 11.5% from the year-ago figure.
Amedisys exited the third quarter of 2018 with cash and cash equivalents of $14 million compared with $25.9 million at the end of the second quarter. The company's long-term obligations (excluding current portion) were $54.9 million at the end of the third quarter compared with $123.9 million at the end of the second quarter. Net cash provided by operating activities was $159.5 million for the nine months ending Sep 30, 2018, compared with $73.5 million in the year-ago quarter.
Our Take
Amedisys ended the third quarter on a promising note with earnings and revenues exceeding the Zacks Consensus Estimate. At the Home Health and Hospice divisions, the company witnessed encouraging growth in Medicare and non-Medicare revenues. Amedisys is currently exploring opportunities in these segments. In this regard, Amedisys recently inked an agreement to buy national hospice care provider —Compassionate Care Hospice. The transaction is expected to close by Feb 1, 2019.
Per Amedisys, the buyout will add new access to its nationwide network of 83 hospice care centers, making the company the third-largest hospice provider in America.
We are also impressed by the company’s solid performance in the recently launched Personal Care segment. A favorable demographic trend and strategic acquisitions also bode well for the company.
However, escalating operating expenses continue to raise concerns. Also, an intense competitive landscape and regulatory concerns persistently pose challenges to the home health and hospice industry.
Zacks Rank & Other Key Picks
Amedisys currently carries a Zacks Rank #1 (Strong Buy).
Intuitive Surgical reported third-quarter 2018 adjusted EPS of $2.83, which beat the Zacks Consensus Estimate of $2.65. Revenues totaled $920.9 million, also surpassing the consensus estimate of $918.6 million.
Stryker Corporation posted third-quarter 2018 adjusted EPS of $1.69, steering past the Zacks Consensus Estimate of $1.68. Operating margin was 17.8%, up 30 bps.
Merit Medical reported third-quarter 2018 adjusted EPS of 47 cents, which trumped the Zacks Consensus Estimate of 42 cents. Revenues of $221.6 million edged past the Zacks Consensus Estimate of $218 million.
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Amedisys (AMED) Tops Earnings and Revenue Estimates in Q3
Amedisys, Inc. (AMED - Free Report) reported earnings per share (EPS) of 95 cents in the third quarter of 2018, up 69.6% from the year-ago 56 cents. The bottom line also beat the Zacks Consensus Estimate of 77 cents by 23.4%.
Net service revenues grossed $417.3 million, up 11.7% year over year. Moreover, the top line beat the Zacks Consensus Estimate by 1.7%.
Quarter in Detail
Within the company's Home Health division, net service revenues totaled $294.9 million in the third quarter, reflecting an 11.7% improvement year over year. Medicare revenues of $208 million rose 8.7% year over year while non-Medicare revenues improved 19.5% year over year to $86.9 million.
Within the Hospice division, net service revenues grossed $103.4 million (up 7.8% year over year), including Medicare revenues of $98 million (up 7.2%) and non-Medicare revenues of $5.4 million (up 20%).
Additionally, the company integrated two additional operating segments within its business, namely, Personal Care and Corporate. At Personal Care, net service revenues totaled $19 million, representing a 38.7% surge from the year-ago number. Meanwhile, the Corporate segment did not register any revenue in the third quarter.
Amedisys, Inc. Price, Consensus and EPS Surprise
Amedisys, Inc. Price, Consensus and EPS Surprise | Amedisys, Inc. Quote
Gross margin expanded 100 basis points (bps) to 40.2% in the quarter under review on a 14.5% gain in gross profit. Expense on salaries and benefits rose 3% to $79.4 million. Other expenses rose 5.5% to $40.3 million. Adjusted operating income of $47.9 million in the reported quarter reflects a 54% rise from the year-ago tally. Adjusted operating margin expanded 320 bps to 11.5% from the year-ago figure.
Amedisys exited the third quarter of 2018 with cash and cash equivalents of $14 million compared with $25.9 million at the end of the second quarter. The company's long-term obligations (excluding current portion) were $54.9 million at the end of the third quarter compared with $123.9 million at the end of the second quarter. Net cash provided by operating activities was $159.5 million for the nine months ending Sep 30, 2018, compared with $73.5 million in the year-ago quarter.
Our Take
Amedisys ended the third quarter on a promising note with earnings and revenues exceeding the Zacks Consensus Estimate. At the Home Health and Hospice divisions, the company witnessed encouraging growth in Medicare and non-Medicare revenues. Amedisys is currently exploring opportunities in these segments. In this regard, Amedisys recently inked an agreement to buy national hospice care provider —Compassionate Care Hospice. The transaction is expected to close by Feb 1, 2019.
Per Amedisys, the buyout will add new access to its nationwide network of 83 hospice care centers, making the company the third-largest hospice provider in America.
We are also impressed by the company’s solid performance in the recently launched Personal Care segment. A favorable demographic trend and strategic acquisitions also bode well for the company.
However, escalating operating expenses continue to raise concerns. Also, an intense competitive landscape and regulatory concerns persistently pose challenges to the home health and hospice industry.
Zacks Rank & Other Key Picks
Amedisys currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the broader medical space, which reported solid earnings this season, are Intuitive Surgical (ISRG - Free Report) , Stryker Corporation (SYK - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Intuitive Surgical reported third-quarter 2018 adjusted EPS of $2.83, which beat the Zacks Consensus Estimate of $2.65. Revenues totaled $920.9 million, also surpassing the consensus estimate of $918.6 million.
Stryker Corporation posted third-quarter 2018 adjusted EPS of $1.69, steering past the Zacks Consensus Estimate of $1.68. Operating margin was 17.8%, up 30 bps.
Merit Medical reported third-quarter 2018 adjusted EPS of 47 cents, which trumped the Zacks Consensus Estimate of 42 cents. Revenues of $221.6 million edged past the Zacks Consensus Estimate of $218 million.
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 >>