HMS Holdings' (HMSY) Q1 Earnings and Revenues Beat Estimates

ABT SYK CNMD

HMS Holdings Corp. reported adjusted earnings of 28 cents per share in first-quarter 2019, which surpassed the Zacks Consensus Estimate of 22 cents by 27.3%. The bottom line also soared 64.7% from the year-ago quarter.

 

Revenues totaled $147.9 million, which beat the Zacks Consensus Estimate by nearly 3%. Moreover, the top line improved 4.6% on a year-over-year basis.

 

Q1 Segmental Analysis by Product

 

Analytical Services

 

Revenues at this segment were $42.1 million in the first quarter, down 15.3% year over year.

 

Within Analytical Services, PI revenues (excluding Medicare RAC) amounted to $27.7 million, down 8.6% year over year.

 

TPM revenues totaled $14.4 million in the quarter under review, reflecting an improvement of 30.9% on a year-over-year basis.

 

COB

 

Revenues at the COB segment grossed $105.9 million in the first quarter, up 15.5% year over year.

 

Q1 Segmental Analysis by Market

 

Commercial revenues in the first quarter were $76.3 million, reflecting growth of 6.3% on a year-over-year basis. 

 

State government revenues amounted to $61.7 million, which climbed 13% year over year.

 

Federal and Other revenues totaled $10 million in the quarter, down 33.3% year over year.

Margin Analysis

Total cost of services in the reported quarter was $99 million, up 1.5% year over year.

 

Adjusted gross profit came in at $48.9 million, up 11.5% from the prior-year quarter figure. Adjusted gross margin was 33.1% of net revenues, up 200 bps year over year.

 

Selling, general and administrative expenses totaled $29.2 million, down 8.6% year over year. Operating income in the first quarter was $19.7 million, up 65.3% on a year-over-year basis. Operating margin in the quarter was 13.3% of net revenues, up 490 bps.

 

Financial Update

 

Cash and cash equivalents amounted to $214.5 million, up 19.8% from the year-end 2018. 

 

Net cash provided by operating activities for the three months ended Mar 31, 2019, came in at $23.1 million, surging 57.1% from the year-ago quarter.

 

Guidance

 

The company has not provided any update regarding its previously-provided guidance for the full-year 2019. Notably, the company had issued a guidance for the full year 2019 during the fourth quarter earnings call. 

 

For 2019, the company anticipates revenues between $640 million and $650 million. This depicts year-over-year growth in the band of 8.4-10.2%. The mid-point of $645 million is above the Zacks Consensus Estimate of $636.8 million.

 

Net income is expected in the band of $64-$70 million, indicating growth in the range of 27.2-39.2% year over year.

 

Adjusted EBITDA is expected in the range of $170-$175 million, reflecting growth of 9-12.2%.

 

Zacks Rank

 

Currently, HMS Holdings carries a Zacks Rank #3 (Hold).

 

Earnings of MedTech Majors at a Glance

 

Some better-ranked stocks which reported solid results this earning season are Stryker Corporation (SYK - Free Report) , Abbott Laboratories (ABT - Free Report) and CONMED Corporation (CNMD - Free Report) , each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Stryker delivered first-quarter 2019 adjusted earnings per share of $1.88, beating the Zacks Consensus Estimate by 2.2%. Revenues of $3.52 billion were in line with the Zacks Consensus Estimate.

 
Abbott reported first-quarter 2019 adjusted earnings of 63 cents per share, beating the Zacks Consensus Estimate by 3.3%. First-quarter worldwide sales came in at $7.54 billion, above the Zacks Consensus Estimate of $7.47 billion.

 

CONMED posted first-quarter 2019 adjusted earnings per share of 57 cents, which beat the Zacks Consensus Estimate of 54 cents. Revenues were $218.4 million, surpassing the Zacks Consensus Estimate of $213 million.

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