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Select Medical's (SEM) Q3 Earnings Beat Mark, Improve Y/Y

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Select Medical Holdings Corporation (SEM - Free Report) delivered third-quarter 2020 earnings of 56 cents per share, beating the Zacks Consensus Estimate of 30 cents by 86.7%. Moreover, the bottom line soared 69.7% year over year on the back of improved revenues.

Additionally, net operating revenues inched up 2.2% year over year to $1.42 billion owing to solid performances by its Critical Illness Recovery and Rehabilitation Hospital segments. Further, the top line surpassed the Zacks Consensus Estimate by 5.2%.

Total costs and expenses dipped 0.3% to $1.2 billion on lower cost of services.

Adjusted EBITDA increased 16.7% year over year to $213.2 million.

Critical Illness Recovery Hospital

Operating revenues climbed 12.2% to $519.5 million, courtesy of better patient days.

Adjusted EBITDA for the segment jumped 55.2% to $88.8 million.

Rehabilitation Hospital Segment

Operating revenues ascended 8.5% to $188.1 million, led by expanded patient days. Adjusted EBITDA was up 21.4% to $44.6 million.

Outpatient Rehabilitation

Operating revenues plunged 95.4% to $240.0 million in the third quarter due to less patient visit volume and suspension of elective surgeries.

Adjusted EBITDA of $30.6 million came against the year-ago quarter’s adjusted EBITDA of $40 million.

Concentra

Operating revenues were down 7.1% year over year to $391.9 million due to a dip in the number of visits.

Adjusted EBITDA increased 3.7% to $80.5 million.

Balance Sheet Position

At the end of the third quarter, the company had $3.3 billion of long-term debt, net of current portion, down 0.8% from the level at 2019 end.

Total equity of $1218 million surged 31.2% from the level on Dec 31, 2019.

Total cash and cash equivalents of $639.8 million were up 90.5% from the level as of Dec 31, 2019.

Cash flow provided by operating activities as of Sep 30, 2020 was $820 million compared with $266 million in the year-ago period.

Share Repurchase Update

Select Medical did not buy back shares in the third quarter.

2020 Outlook

Select Medical updated its full-year guidance after third-quarter results. The company now expects net operating revenues in the range of $5.44-$5.5 billion for the current year.

Adjusted EBITDA is expected in the band of $745-$765 million.

The company also estimates annual adjusted earnings per share within $1.61-$1.71. This excludes the gains on sales of businesses and the related tax effects.

Zacks Rank

Select Medical currently carries a Zacks Rank #2 (Buy). 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 reported second-quarter results so far, earnings of Universal Health Services, Inc. (UHS - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) ) beat the respective Zacks Consensus Estimate while that of HCA Healthcare, Inc. (HCA - Free Report) missed the same.

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