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AMN Healthcare Services Inc.’s (AMN - Free Report) stock has declined 3.3% as of Aug 11, 2020, despite better-than-expected results.
The company reported second-quarter 2020 adjusted earnings per share (EPS) of 83 cents, beating the Zacks Consensus Estimate of 63 cents by 31.8%. The bottom line increased 7.8% year over year.
Revenues of $608.4 million surpassed the Zacks Consensus Estimate by 8.7%. On a year-over-year basis, revenues increased 14%.
Segment Details
In the second quarter of 2020, the Nurse and Allied Solutions segment’s revenues totaled $444.5 million, up 21% year over year and 13% on an organic basis.This was driven by 41% year-over-year growth in the Travel Nurse division revenues and a 10% rise in the Allied division due to the Advanced Medical acquisition.
The Physician and Leadership Solutions segment’s revenues totaled $108.6 million, down 24% year over year. All business lines in the segment were adversely affected by reductions in non-emergency care. The downside was owing to a 25% decline in Locum tenens revenues, 17% drop in Interim leadership revenues and a 34% fall in physician and leadership search businesses.
Technology and Workforce Solutions segment revenues came in at $55.3 million, up 123% year over year and 3% on an organic basis, primarily attributable to the company’s recent buyouts of b4health and Stratus Video.
AMN Healthcare Services Inc Price, Consensus and EPS Surprise
In the second quarter, gross profit totaled $197.5 million, up 10% year over year. As a percentage of revenues, gross margin was 32.5%, contracting 108 basis points (bps).
Adjusted operating profit in the quarter was $60.5 million, up 4.5%. As a percentage of revenues, adjusted operating margin was 9.9%, down 87 bps.
Guidance
For the third quarter of 2020, AMN Healthcare expects revenues in the range of $510-$525 million. The Zacks Consensus Estimate for the same stands at $517.8 million.
With respect to the Nurse and Allied Solutions segment, the company projects third-quarter revenue decline of almost 10% from the prior-year figure.
In the third quarter, Technology and Workforce Solutions segment revenues are expected to grow almost 140% from the prior-year figure.The company projects third-quarter revenues at the Physician and Leadership Solutions segment to decline almost 30% from the prior-year figure.
Operating margin is expected above 7%, while gross margin is estimated within 33-33.5%.
Our Take
AMN Healthcare exited the second quarter on a strong note. The company gained from two of the three operating segments in the quarter. Management is upbeat about the latest Stratus Video and Advanced Medical buyouts, which are expected to expand its travel as well as school therapy and travel nurse staffing capabilities. Despite demand being disrupted by the COVID-19 pandemic, most business lines performed in line or better than the company’s guidance.
However, revenue decline within Physician and Leadership Solutions segment is concerning.The contraction in both margins is also discouraging.
Zacks Rank and Other Key Picks
AMN Healthcare currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. (TMO - Free Report) , PerkinElmer, Inc. and OPKO Health, Inc. (OPK - Free Report) . While PerkinElmer sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion outpaced the consensus mark by 0.1%.
PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, surpassing the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.
OPKO Health reported second-quarter 2020 EPS of 5 cents against the Zacks Consensus Estimate of a loss of 7 cents per share. Revenues of $301.2 million surpassed the consensus estimate by 28.4%.
Zacks Top 10 Stocks for 2020
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Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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AMN Healthcare (AMN) Loses 3.3% Despite Q2 Earnings Beat
AMN Healthcare Services Inc.’s (AMN - Free Report) stock has declined 3.3% as of Aug 11, 2020, despite better-than-expected results.
The company reported second-quarter 2020 adjusted earnings per share (EPS) of 83 cents, beating the Zacks Consensus Estimate of 63 cents by 31.8%. The bottom line increased 7.8% year over year.
Revenues of $608.4 million surpassed the Zacks Consensus Estimate by 8.7%. On a year-over-year basis, revenues increased 14%.
Segment Details
In the second quarter of 2020, the Nurse and Allied Solutions segment’s revenues totaled $444.5 million, up 21% year over year and 13% on an organic basis.This was driven by 41% year-over-year growth in the Travel Nurse division revenues and a 10% rise in the Allied division due to the Advanced Medical acquisition.
The Physician and Leadership Solutions segment’s revenues totaled $108.6 million, down 24% year over year. All business lines in the segment were adversely affected by reductions in non-emergency care. The downside was owing to a 25% decline in Locum tenens revenues, 17% drop in Interim leadership revenues and a 34% fall in physician and leadership search businesses.
Technology and Workforce Solutions segment revenues came in at $55.3 million, up 123% year over year and 3% on an organic basis, primarily attributable to the company’s recent buyouts of b4health and Stratus Video.
AMN Healthcare Services Inc Price, Consensus and EPS Surprise
AMN Healthcare Services Inc price-consensus-eps-surprise-chart | AMN Healthcare Services Inc Quote
Margin
In the second quarter, gross profit totaled $197.5 million, up 10% year over year. As a percentage of revenues, gross margin was 32.5%, contracting 108 basis points (bps).
Adjusted operating profit in the quarter was $60.5 million, up 4.5%. As a percentage of revenues, adjusted operating margin was 9.9%, down 87 bps.
Guidance
For the third quarter of 2020, AMN Healthcare expects revenues in the range of $510-$525 million. The Zacks Consensus Estimate for the same stands at $517.8 million.
With respect to the Nurse and Allied Solutions segment, the company projects third-quarter revenue decline of almost 10% from the prior-year figure.
In the third quarter, Technology and Workforce Solutions segment revenues are expected to grow almost 140% from the prior-year figure.The company projects third-quarter revenues at the Physician and Leadership Solutions segment to decline almost 30% from the prior-year figure.
Operating margin is expected above 7%, while gross margin is estimated within 33-33.5%.
Our Take
AMN Healthcare exited the second quarter on a strong note. The company gained from two of the three operating segments in the quarter. Management is upbeat about the latest Stratus Video and Advanced Medical buyouts, which are expected to expand its travel as well as school therapy and travel nurse staffing capabilities. Despite demand being disrupted by the COVID-19 pandemic, most business lines performed in line or better than the company’s guidance.
However, revenue decline within Physician and Leadership Solutions segment is concerning.The contraction in both margins is also discouraging.
Zacks Rank and Other Key Picks
AMN Healthcare currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. (TMO - Free Report) , PerkinElmer, Inc. and OPKO Health, Inc. (OPK - Free Report) . While PerkinElmer sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion outpaced the consensus mark by 0.1%.
PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, surpassing the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.
OPKO Health reported second-quarter 2020 EPS of 5 cents against the Zacks Consensus Estimate of a loss of 7 cents per share. Revenues of $301.2 million surpassed the consensus estimate by 28.4%.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>