LHC Group, Inc.( LHCG) reported third-quarter 2022 adjusted earnings per share (EPS) of $1.06, which missed the Zacks Consensus Estimate of $1.37 by 22.6%. The bottom line declined 26.9% year over year.
GAAP EPS was 56 cents in the quarter, down 36.4% on a year-over-year basis.
Revenue Details
The company reported net service revenues of $576.9 million in the quarter, which missed the Zacks Consensus Estimate by 6.4%. However, the top line improved 2% on a year-over-year basis.
Q3 Highlights
Home health service revenues were $373.3 million, down 3.5% year over year. Meanwhile, hospice services revenues amounted to $103.8 million, up 25.6%. Revenues from Home and community-based services were up 4.8% to $48 million. Revenues from Facility-based services and HCI were $31.4 million (down 3%) and $20.4 million (up 13.8%), respectively.
Margin Analysis
Gross profit in the quarter totaled $229.1 million, up 3.4%. Gross margin was 39.7%, up approximately 500 basis points (bps) on a year-over-year basis.
Operating profit was $38 million, down 15.8% from the prior-year quarter. The operating margin was 6.6%, down approximately 140 bps.
Financial Position
LHC Group exited the third quarter with cash amounting to $10.5 million, down from $27.4 million sequentially.
Net cash provided by operating activities at the end of the third quarter totaled $10 million against net cash used in operating activities of $51.6 million in the year-ago quarter.
Wrapping Up
LHC Group exited the third quarter on a dismal note, wherein both earnings and revenues missed the Zacks Consensus Estimate. The company continues to gain from hospice admission revenues that witnessed growth on a year-over-year basis. However, home health admission revenues declined year over year, hurting top-line growth.
Nevertheless, the contraction in operating margins is concerning. The year-over-year decline in the bottom line is a woe. A highly competitive home healthcare market remains a headwind.
LHC Group’s acquisition by UnitedHealth Group, announced in March, is still pending.
Zacks Rank and Stocks to Consider
Currently, LHC Group carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health, Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an earnings yield of 5.5% against the industry’s (2.3%). ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, having a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $384 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 22.7% for 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 22.04%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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LHC Group, Inc.( LHCG) reported third-quarter 2022 adjusted earnings per share (EPS) of $1.06, which missed the Zacks Consensus Estimate of $1.37 by 22.6%. The bottom line declined 26.9% year over year.
GAAP EPS was 56 cents in the quarter, down 36.4% on a year-over-year basis.
Revenue Details
The company reported net service revenues of $576.9 million in the quarter, which missed the Zacks Consensus Estimate by 6.4%. However, the top line improved 2% on a year-over-year basis.
Q3 Highlights
Home health service revenues were $373.3 million, down 3.5% year over year. Meanwhile, hospice services revenues amounted to $103.8 million, up 25.6%. Revenues from Home and community-based services were up 4.8% to $48 million. Revenues from Facility-based services and HCI were $31.4 million (down 3%) and $20.4 million (up 13.8%), respectively.
Margin Analysis
Gross profit in the quarter totaled $229.1 million, up 3.4%. Gross margin was 39.7%, up approximately 500 basis points (bps) on a year-over-year basis.
Operating profit was $38 million, down 15.8% from the prior-year quarter. The operating margin was 6.6%, down approximately 140 bps.
Financial Position
LHC Group exited the third quarter with cash amounting to $10.5 million, down from $27.4 million sequentially.
Net cash provided by operating activities at the end of the third quarter totaled $10 million against net cash used in operating activities of $51.6 million in the year-ago quarter.
Wrapping Up
LHC Group exited the third quarter on a dismal note, wherein both earnings and revenues missed the Zacks Consensus Estimate. The company continues to gain from hospice admission revenues that witnessed growth on a year-over-year basis. However, home health admission revenues declined year over year, hurting top-line growth.
Nevertheless, the contraction in operating margins is concerning. The year-over-year decline in the bottom line is a woe. A highly competitive home healthcare market remains a headwind.
LHC Group’s acquisition by UnitedHealth Group, announced in March, is still pending.
Zacks Rank and Stocks to Consider
Currently, LHC Group carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health, Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an earnings yield of 5.5% against the industry’s (2.3%). ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, having a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $384 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 22.7% for 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 22.04%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s an American AI company that’s riding low right now, but it has rounded up clients like BMW, GE, Dell Computer, and Bosch. It has prospects for not just doubling but quadrupling in the year to come. Of course, all our picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock And 4 Runners Up
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