Select Medical Holdings Corporation (SEM - Free Report) reported first-quarter 2018 earnings of 29 cents per share, which outperformed the Zacks Consensus Estimate by 7.4%. Also, the bottom line improved 38.1% year over year.
The company’s first-quarter results benefited from a solid performance across all its segments along with higher revenues.
Operational Update
Operating revenues of Select Medical grossed $1.3 billion during the quarter under review, up 14.8% year over year. Higher segmental revenues led to this upside. Moreover, the top line beat the Zacks Consensus Estimate by 0.7%.
Total operating expenses amounted to $1.1 billion, up 14.5% year over year. Increase of 14.7% in cost of services, 9.9% higher depreciation and amortization expenses and a 13.2% rise in general and administrative expenses induced this overall escalation in expenses.
Income from operations improved 18.3% year over year to $108.6 million on the back of stronger revenues.
Adjusted EBITDA grew 17.5% year over year to $163.2 million.
Segment Update
Long Term Acute Care segment operating revenues rose 4.4% year over year to $464.7 million.
Adjusted EBITDA was $73 million, having inched up 0.9% year over year with margins contracting 60 basis points (bps) to 15.7%.
Inpatient Rehabilitation segment operating revenues increased 20.7% year over year to $174.8 million.
Adjusted EBITDA was $26.8 million, soaring 64% year over year with margins having improved 400 basis points (bps) to 15.3%.
Operating revenues from Outpatient Rehabilitation rose 2.8% year over year to $257.4 million.
Adjusted EBITDA was $30.5 million, having slid 2.9% year over year with margins contracting 60 basis points (bps) to 11.9%.
Concentra segment reported net operating revenues of $356.1 million, up 42.1% from the prior-year quarter. Adjusted EBITDA increased 35.7% year over year to $57.8 million.
Adjusted EBITDA margin contracted 80 bps to 16.2%.
Financial Update
Select Medical exited the first quarter with cash of $119.7 million, down 2.3% from $122.5 million at year-end 2017.
As of Mar 31, 2018, long-term debt, net of current portion, increased 29.9% to $3.5 billion from the figure recorded at 2017-end.
Cash flow from operations was $50.7 million for the three months ended Mar 31, 2018, which compared favorably with ($55.9) million for the same period in 2017.
2018 Guidance
Select Medical expects earnings per share between 97 cents and $1.12. Net income is anticipated between 93 cents and $1.08 (which includes the first-quarter loss on early retirement of debt and U.S. HealthWorks acquisition costs and the related tax effects).
Net operating revenues are projected between $5 billion and $5.2 billion.
Adjusted EBITDA is likely to be 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 Organizations
Among other players from the industry having reported first-quarter earnings so far, the bottom line of Anthem, Inc. , Centene Corporation (CNC - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) beat the respective Zacks Consensus Estimate.
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Select Medical Holdings Corporation (SEM - Free Report) reported first-quarter 2018 earnings of 29 cents per share, which outperformed the Zacks Consensus Estimate by 7.4%. Also, the bottom line improved 38.1% year over year.
The company’s first-quarter results benefited from a solid performance across all its segments along with higher revenues.
Operational Update
Operating revenues of Select Medical grossed $1.3 billion during the quarter under review, up 14.8% year over year. Higher segmental revenues led to this upside. Moreover, the top line beat the Zacks Consensus Estimate by 0.7%.
Total operating expenses amounted to $1.1 billion, up 14.5% year over year. Increase of 14.7% in cost of services, 9.9% higher depreciation and amortization expenses and a 13.2% rise in general and administrative expenses induced this overall escalation in expenses.
Income from operations improved 18.3% year over year to $108.6 million on the back of stronger revenues.
Adjusted EBITDA grew 17.5% year over year to $163.2 million.
Segment Update
Long Term Acute Care segment operating revenues rose 4.4% year over year to $464.7 million.
Adjusted EBITDA was $73 million, having inched up 0.9% year over year with margins contracting 60 basis points (bps) to 15.7%.
Inpatient Rehabilitation segment operating revenues increased 20.7% year over year to $174.8 million.
Adjusted EBITDA was $26.8 million, soaring 64% year over year with margins having improved 400 basis points (bps) to 15.3%.
Operating revenues from Outpatient Rehabilitation rose 2.8% year over year to $257.4 million.
Adjusted EBITDA was $30.5 million, having slid 2.9% year over year with margins contracting 60 basis points (bps) to 11.9%.
Concentra segment reported net operating revenues of $356.1 million, up 42.1% from the prior-year quarter. Adjusted EBITDA increased 35.7% year over year to $57.8 million.
Adjusted EBITDA margin contracted 80 bps to 16.2%.
Financial Update
Select Medical exited the first quarter with cash of $119.7 million, down 2.3% from $122.5 million at year-end 2017.
As of Mar 31, 2018, long-term debt, net of current portion, increased 29.9% to $3.5 billion from the figure recorded at 2017-end.
Cash flow from operations was $50.7 million for the three months ended Mar 31, 2018, which compared favorably with ($55.9) million for the same period in 2017.
2018 Guidance
Select Medical expects earnings per share between 97 cents and $1.12. Net income is anticipated between 93 cents and $1.08 (which includes the first-quarter loss on early retirement of debt and U.S. HealthWorks acquisition costs and the related tax effects).
Net operating revenues are projected between $5 billion and $5.2 billion.
Adjusted EBITDA is likely to be 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 Organizations
Among other players from the industry having reported first-quarter earnings so far, the bottom line of Anthem, Inc. , Centene Corporation (CNC - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) beat the respective Zacks Consensus Estimate.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
https://finance.yahoo.com/news/select-medical-holdings-corporation-announces-203000744.html
See the pot trades we're targeting>>
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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