The Ensign Group, Inc. (ENSG - Free Report) reported first-quarter 2023 adjusted operating earnings of $1.13 per share, which outpaced the Zacks Consensus Estimate by 2.7% and our estimate of $1.08. The bottom line climbed 14.1% year over year.
Operating revenues amounted to $886.8 million, which rose 24.3% year over year in the quarter under review. The top line beat the consensus mark by 4.8%. The metric benefited from improved skilled services and rental revenues.
Despite reporting better-than-expected earnings, its shares lost 3.6% on Apr 27. An elevated expense level is expected to have acted as a drag on ENSG’s results. Nevertheless, the quarterly results were aided by solid segmental contributions and growing patient volumes.
Q1 Update
ENSG reported an adjusted net income of $64.6 million in the first quarter, which improved 14.6% year over year.
Same-store occupancy grew 4.2% year over year, while transitioning occupancy increased 5.4% year over year.
Total expenses of $812 million escalated 26% year over year in the quarter under review and beat our estimate of $765.3 million. The year-over-year increase resulted from the higher cost of services, rent-cost of services, general and administrative expenses, and depreciation and amortization.
Segmental Update
Skilled Services: The segment’s revenues of $850.9 million climbed 23.9% year over year. Segmental income grew 15.4% year over year to $113.3 million in the first quarter.
Skilled nursing and campus operations of the segment totaled 253 and 26, respectively, at the first-quarter end.
Standard Bearer: Rental revenues were $19.7 million in the segment, which rose 14.7% year over year. Segmental income of $7.2 million increased 4.6% year over year.
Funds from Operations (FFO) grew 10.6% year over year to $13.2 million in the quarter under review.
Financial Update (as of Mar 31, 2023)
Ensign Group exited the first quarter with cash and cash equivalents of $327 million, which increased 3.4% from the 2022-end level.
Total assets of $3,862.2 million grew 11.9% from the figure at 2022 end.
Long-term debt-less current maturities amounted to $148.3 million. The figure dipped 0.6% from the figure as of Dec 31, 2022. Short-term debt totaled $3.9 million.
Total equity of $1,319.8 million rose 5.7% from the 2022-end figure.
In the reported quarter, ENSG generated operating cash flows of $48.3 million, which increased 5.4% year over year.
Capital-Deployment Update
Ensign Group did not buy back shares in the first quarter as part of the share repurchase program authorized by management in July 2022.
It paid out a quarterly dividend of 5.75 cents per share.
2023 Outlook
Revenues are anticipated between $3.68 billion and $3.73 billion, up from the prior mentioned $3.55-$3.62 billion. The mid-point of the revised guidance indicates an improvement of 22.5% from the 2022 figure.
Earnings per share are forecast to be $4.64-$4.77 this year, higher than the earlier mentioned $4.60-$4.74. The mid-point of the updated outlook suggests 13.8% growth from the reported figure of 2022.
The weighted average common shares outstanding is estimated at 57.7 million.
Zacks Rank
Ensign Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported first-quarter 2023 results so far, the bottom-line results of Molina Healthcare, Inc. (MOH - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Baxter International Inc. (BAX - Free Report) beat the Zacks Consensus Estimate.
Molina Healthcare reported first-quarter 2023 adjusted earnings per share of $5.81, which beat the Zacks Consensus Estimate by 13.3% and our estimate of $5.14. The bottom line improved 18.6% year over year. Total revenues of $8,149 million improved 4.9% year over year in the quarter under review. However, the top line missed the consensus mark by 1% and our estimate of $8,218.2 million. MOH’s premium revenues were $7,885 million, which rose 4.7% year over year. It reported a net income of $321 million, which soared 24.4% year over year in the quarter under review. The consolidated medical care ratio or MCR came in at 87.1%.
West Pharmaceuticals delivered adjusted EPS of $1.98 in the first quarter of 2023, down 13.9% year over year. However, the figure beat the Zacks Consensus Estimate by 18.7%. WST registered net sales of $716.6 million in the first quarter, down 0.5% year over year. The figure, however, beat the Zacks Consensus Estimate by 2.8%. In the quarter under review, adjusted operating profit totaled $158.7 million, indicating a decline of 16.1% from the prior-year quarter. The adjusted operating margin in the first quarter contracted 350 bps to 22.4%.
Baxter reported first-quarter 2023 adjusted EPS of 59 cents, which beat the Zacks Consensus Estimate of 48 cents. However, the bottom line declined 37% from the year-ago quarter’s level. Revenues of $3.65 billion beat the Zacks Consensus Estimate of $3.6 billion. The top line declined 2% year over year on a reported basis but improved 2% on a constant currency (cc) basis. In the reported quarter, Patient Support Systems reported revenues of $348 million, while Front Line Care and Surgical Solutions recorded revenues of $302 million and $81 million, respectively. BAX’s adjusted operating income was $503 million, down 24.5% year over year.
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The Ensign Group, Inc. (ENSG - Free Report) reported first-quarter 2023 adjusted operating earnings of $1.13 per share, which outpaced the Zacks Consensus Estimate by 2.7% and our estimate of $1.08. The bottom line climbed 14.1% year over year.
Operating revenues amounted to $886.8 million, which rose 24.3% year over year in the quarter under review. The top line beat the consensus mark by 4.8%. The metric benefited from improved skilled services and rental revenues.
Despite reporting better-than-expected earnings, its shares lost 3.6% on Apr 27. An elevated expense level is expected to have acted as a drag on ENSG’s results. Nevertheless, the quarterly results were aided by solid segmental contributions and growing patient volumes.
Q1 Update
ENSG reported an adjusted net income of $64.6 million in the first quarter, which improved 14.6% year over year.
Same-store occupancy grew 4.2% year over year, while transitioning occupancy increased 5.4% year over year.
Total expenses of $812 million escalated 26% year over year in the quarter under review and beat our estimate of $765.3 million. The year-over-year increase resulted from the higher cost of services, rent-cost of services, general and administrative expenses, and depreciation and amortization.
Segmental Update
Skilled Services: The segment’s revenues of $850.9 million climbed 23.9% year over year. Segmental income grew 15.4% year over year to $113.3 million in the first quarter.
Skilled nursing and campus operations of the segment totaled 253 and 26, respectively, at the first-quarter end.
Standard Bearer: Rental revenues were $19.7 million in the segment, which rose 14.7% year over year. Segmental income of $7.2 million increased 4.6% year over year.
Funds from Operations (FFO) grew 10.6% year over year to $13.2 million in the quarter under review.
Financial Update (as of Mar 31, 2023)
Ensign Group exited the first quarter with cash and cash equivalents of $327 million, which increased 3.4% from the 2022-end level.
Total assets of $3,862.2 million grew 11.9% from the figure at 2022 end.
Long-term debt-less current maturities amounted to $148.3 million. The figure dipped 0.6% from the figure as of Dec 31, 2022. Short-term debt totaled $3.9 million.
Total equity of $1,319.8 million rose 5.7% from the 2022-end figure.
In the reported quarter, ENSG generated operating cash flows of $48.3 million, which increased 5.4% year over year.
Capital-Deployment Update
Ensign Group did not buy back shares in the first quarter as part of the share repurchase program authorized by management in July 2022.
It paid out a quarterly dividend of 5.75 cents per share.
2023 Outlook
Revenues are anticipated between $3.68 billion and $3.73 billion, up from the prior mentioned $3.55-$3.62 billion. The mid-point of the revised guidance indicates an improvement of 22.5% from the 2022 figure.
Earnings per share are forecast to be $4.64-$4.77 this year, higher than the earlier mentioned $4.60-$4.74. The mid-point of the updated outlook suggests 13.8% growth from the reported figure of 2022.
The weighted average common shares outstanding is estimated at 57.7 million.
Zacks Rank
Ensign Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported first-quarter 2023 results so far, the bottom-line results of Molina Healthcare, Inc. (MOH - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Baxter International Inc. (BAX - Free Report) beat the Zacks Consensus Estimate.
Molina Healthcare reported first-quarter 2023 adjusted earnings per share of $5.81, which beat the Zacks Consensus Estimate by 13.3% and our estimate of $5.14. The bottom line improved 18.6% year over year. Total revenues of $8,149 million improved 4.9% year over year in the quarter under review. However, the top line missed the consensus mark by 1% and our estimate of $8,218.2 million. MOH’s premium revenues were $7,885 million, which rose 4.7% year over year. It reported a net income of $321 million, which soared 24.4% year over year in the quarter under review. The consolidated medical care ratio or MCR came in at 87.1%.
West Pharmaceuticals delivered adjusted EPS of $1.98 in the first quarter of 2023, down 13.9% year over year. However, the figure beat the Zacks Consensus Estimate by 18.7%. WST registered net sales of $716.6 million in the first quarter, down 0.5% year over year. The figure, however, beat the Zacks Consensus Estimate by 2.8%. In the quarter under review, adjusted operating profit totaled $158.7 million, indicating a decline of 16.1% from the prior-year quarter. The adjusted operating margin in the first quarter contracted 350 bps to 22.4%.
Baxter reported first-quarter 2023 adjusted EPS of 59 cents, which beat the Zacks Consensus Estimate of 48 cents. However, the bottom line declined 37% from the year-ago quarter’s level. Revenues of $3.65 billion beat the Zacks Consensus Estimate of $3.6 billion. The top line declined 2% year over year on a reported basis but improved 2% on a constant currency (cc) basis. In the reported quarter, Patient Support Systems reported revenues of $348 million, while Front Line Care and Surgical Solutions recorded revenues of $302 million and $81 million, respectively. BAX’s adjusted operating income was $503 million, down 24.5% year over year.
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