Select Medical Holdings Corp. (SEM - Free Report) reported fourth-quarter 2017 earnings of 31 cents per share, which surpassed the Zacks Consensus Estimate by 63.16%. Also, the bottom line more than doubled year over year.
Select Medical Holdings Corporation Price, Consensus and EPS Surprise
The company’s fourth-quarter results benefited from a solid performance across all its segments. Both revenues and margins expanded.
Operational Update
Operating revenues of Select Medical grossed $1.11 billion during the quarter, up 6.6% year over year. Higher Outpatient Rehabilitation revenues plus Specialty and Concentra revenues led to this upside. Moreover, the top line surpassed the Zacks Consensus Estimate by 1.35%.
Total operating expenses amounted to $1.04 billion, up 4.8% year over year. Increase of 4% in cost of services, 7.9% higher depreciation and amortization expenses, 9.3% rise in general and administrative expenses and a 16.4% increase in bad debt expenses induced this overall escalation in expenses.
Income from operations improved 37% year over year to $76.4 million on the back of higher revenues.
Adjusted EBITDA rose 27.6% year over year to $124.6 million.
Full-Year Highlights
Earnings of 97 cents per share surged 59% over the tally in 2016.
Operating revenues of Select Medical logged $4.4 billion during the reported quarter, up 3.7% year over year
Segment Update
Long Term Acute Care segment operating revenues rose 2.1% year over year to $431.9 million.
Adjusted EBITDA was $58.4 million, having increased 28.9% year over year with margins expanding 240 basis points (bps) to 13.5%.
Inpatient Rehabilitation segment operating revenues grew 24.7% year over year to $171.1 million.
Adjusted EBITDA was $28 million, soaring 65.1% year over year with margins having improved 400 basis points (bps) to 16.4%.
Operating revenues from Outpatient Rehabilitation rose 2.7% year over year to $256.4 million.
Adjusted EBITDA was $30 million, having slid 2.6% year over year with margins contracting 60 basis points (bps) to 11.7%.
Concentra segment reported net operating revenues of $255 million, up 7.9% from the prior-year quarter. Adjusted EBITDA increased 28% year over year to $31.9 million.
Adjusted EBITDA margin expanded 200 bps to 12.5%.
Financial Update
Select Medical exited 2017 with cash of $122.5 million, up from $99 million at year-end 2016.
As of Dec 31, 2017, long-term debt, net of current portion, slipped 0.3% to $2.7 billion from the figure recorded at 2016-end.
Cash flow from operations was $238.1 million in 2017, down from $346.6 million in 2016.
2018 Guidance
Select Medical expects earnings per share between 97 cents and $1.12 on revenues of $5-$5.2 billion. Net income is anticipated between 69 cents and 87 cents.
Adjusted EBITDA is projected between $630 million and $660 million.
Zacks Rank
Select Medical carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Health Maintenance Organization Stocks
Among other stocks from the health maintenance organization industry having reported fourth-quarter earnings, the bottom line of Humana Inc. (HUM - Free Report) , Aetna Inc. and UnitedHealth Group Incorporated (UNH - Free Report) topped the respective Zacks Consensus Estimate.
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Select Medical Holdings Corp. (SEM - Free Report) reported fourth-quarter 2017 earnings of 31 cents per share, which surpassed the Zacks Consensus Estimate by 63.16%. Also, the bottom line more than doubled year over year.
Select Medical Holdings Corporation Price, Consensus and EPS Surprise
The company’s fourth-quarter results benefited from a solid performance across all its segments. Both revenues and margins expanded.
Operational Update
Operating revenues of Select Medical grossed $1.11 billion during the quarter, up 6.6% year over year. Higher Outpatient Rehabilitation revenues plus Specialty and Concentra revenues led to this upside. Moreover, the top line surpassed the Zacks Consensus Estimate by 1.35%.
Total operating expenses amounted to $1.04 billion, up 4.8% year over year. Increase of 4% in cost of services, 7.9% higher depreciation and amortization expenses, 9.3% rise in general and administrative expenses and a 16.4% increase in bad debt expenses induced this overall escalation in expenses.
Income from operations improved 37% year over year to $76.4 million on the back of higher revenues.
Adjusted EBITDA rose 27.6% year over year to $124.6 million.
Full-Year Highlights
Earnings of 97 cents per share surged 59% over the tally in 2016.
Operating revenues of Select Medical logged $4.4 billion during the reported quarter, up 3.7% year over year
Segment Update
Long Term Acute Care segment operating revenues rose 2.1% year over year to $431.9 million.
Adjusted EBITDA was $58.4 million, having increased 28.9% year over year with margins expanding 240 basis points (bps) to 13.5%.
Inpatient Rehabilitation segment operating revenues grew 24.7% year over year to $171.1 million.
Adjusted EBITDA was $28 million, soaring 65.1% year over year with margins having improved 400 basis points (bps) to 16.4%.
Operating revenues from Outpatient Rehabilitation rose 2.7% year over year to $256.4 million.
Adjusted EBITDA was $30 million, having slid 2.6% year over year with margins contracting 60 basis points (bps) to 11.7%.
Concentra segment reported net operating revenues of $255 million, up 7.9% from the prior-year quarter. Adjusted EBITDA increased 28% year over year to $31.9 million.
Adjusted EBITDA margin expanded 200 bps to 12.5%.
Financial Update
Select Medical exited 2017 with cash of $122.5 million, up from $99 million at year-end 2016.
As of Dec 31, 2017, long-term debt, net of current portion, slipped 0.3% to $2.7 billion from the figure recorded at 2016-end.
Cash flow from operations was $238.1 million in 2017, down from $346.6 million in 2016.
2018 Guidance
Select Medical expects earnings per share between 97 cents and $1.12 on revenues of $5-$5.2 billion. Net income is anticipated between 69 cents and 87 cents.
Adjusted EBITDA is projected between $630 million and $660 million.
Zacks Rank
Select Medical carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Health Maintenance Organization Stocks
Among other stocks from the health maintenance organization industry having reported fourth-quarter earnings, the bottom line of Humana Inc. (HUM - Free Report) , Aetna Inc. and UnitedHealth Group Incorporated (UNH - Free Report) topped the respective Zacks Consensus Estimate.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
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 a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent 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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