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Encompass Health (EHC) Q1 Earnings Beat, Hikes '21 View
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Encompass Health Corporation (EHC - Free Report) reported first-quarter 2021 adjusted earnings of $1.05 per share, which outpaced the Zacks Consensus Estimate by 31.3%. Further, the bottom line improved 20.7% year over year.
The company’s results reflect higher revenues across its Inpatient Rehabilitation segment, partly offset by elevated operating expenses.
Operational Update
The company’s net operating revenues improved 4.1% year over year to $1.2 billion in the quarter. The top line benefited from favorable pricing, partly offset by reduced volumes across both the Inpatient Rehabilitation, and Home Health and Hospice segments. The top line also surpassed the Zacks Consensus Estimate by 0.2%.
Adjusted EBITDA climbed 10% year over year to $250.8 million in the quarter.
Total operating expenses increased 2.1% year over year to $1 billion primarily due to higher salaries and benefits, other operating expenses, supplies and, depreciation and amortization.
General and administrative expenses, excluding stock-based compensation, increased 22.5% year over year to $34.9 million. The rise was due to higher costs related to incentive compensation.
Encompass Health Corporation Price, Consensus and EPS Surprise
The segment’s revenues of $959.9 million advanced 5.6% year over year courtesy of 5.9% growth in revenues from Inpatient business. The Inpatient business was buoyed by favorable pricing, partly offset by lower volumes.
However, the increase in the segment’s revenues was partially offset by 8.3% drop in revenues from Outpatient and other business.
Adjusted EBITDA improved 9% year over to $234.9 million attributable to higher revenues.
Home Health and Hospice
Its worth mentioning that the company is looking for strategic alternatives for this segment.
Revenues at the segment dipped 0.8% year over year to $270.5 million in the quarter mainly due to 2.2% decline in revenues from Home Health sub-segment. The sub-segment was affected by lower episodic admissions. Nevertheless, the decline was partly mitigated by 5.4% rise in Hospice sub-segment revenues driven by rise in same-store admissions.
Adjusted EBITDA of $50.8 million rose 23.9% year over year in the quarter attributable to reduced cost per visit, which resulted from changes implemented in the clinician compensation model changes in May 2020 and prudent management of full-time staff’s overall productivity.
Financial Update
As of Mar 31, 2021, Encompass Health’s cash and cash equivalents of $223.9 million remained unchanged from 2020-end figure.
Long-term debt, net of current portion as of Mar 31, 2021, declined 2.8% to $3.2 billion from the level at 2020 end.
In the first quarter, adjusted free cash flow climbed 44% year over year to $107.4 million.
2021 Guidance Updated
Concurrent with first-quarter results, the company revised its full-year outlook for 2021. This can be attributed to strong first-quarter 2021 results and expanded suspension of sequestration.
Since the company has not yet arrived on a final decision regarding the home health and hospice business, it has taken the existing business structure into consideration while laying down expectations.
For the current year, management anticipates net operating revenues to be $5.06-$5.23 billion higher than the previous guidance of $5-$5.17 billion.
In 2021, the company’s adjusted EBITDA is expected to lie in the range of $1 billion to $1.03 billion, up from the prior guidance of $925-$955 million.
Adjusted earnings per share from continuing operations is expected to be $3.94-$4.16 in 2021, higher than the previous guidance of $3.31-$3.53.
Of the medical sector players that reported first-quarter results so far, the bottom line of Tenet Healthcare Corporation (THC - Free Report) , Universal Health Services, Inc. (UHS - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) beat the Zacks Consensus Estimate.
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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.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Encompass Health (EHC) Q1 Earnings Beat, Hikes '21 View
Encompass Health Corporation (EHC - Free Report) reported first-quarter 2021 adjusted earnings of $1.05 per share, which outpaced the Zacks Consensus Estimate by 31.3%. Further, the bottom line improved 20.7% year over year.
The company’s results reflect higher revenues across its Inpatient Rehabilitation segment, partly offset by elevated operating expenses.
Operational Update
The company’s net operating revenues improved 4.1% year over year to $1.2 billion in the quarter. The top line benefited from favorable pricing, partly offset by reduced volumes across both the Inpatient Rehabilitation, and Home Health and Hospice segments. The top line also surpassed the Zacks Consensus Estimate by 0.2%.
Adjusted EBITDA climbed 10% year over year to $250.8 million in the quarter.
Total operating expenses increased 2.1% year over year to $1 billion primarily due to higher salaries and benefits, other operating expenses, supplies and, depreciation and amortization.
General and administrative expenses, excluding stock-based compensation, increased 22.5% year over year to $34.9 million. The rise was due to higher costs related to incentive compensation.
Encompass Health Corporation Price, Consensus and EPS Surprise
Encompass Health Corporation price-consensus-eps-surprise-chart | Encompass Health Corporation Quote
Segmental Results
Inpatient Rehabilitation
The segment’s revenues of $959.9 million advanced 5.6% year over year courtesy of 5.9% growth in revenues from Inpatient business. The Inpatient business was buoyed by favorable pricing, partly offset by lower volumes.
However, the increase in the segment’s revenues was partially offset by 8.3% drop in revenues from Outpatient and other business.
Adjusted EBITDA improved 9% year over to $234.9 million attributable to higher revenues.
Home Health and Hospice
Its worth mentioning that the company is looking for strategic alternatives for this segment.
Revenues at the segment dipped 0.8% year over year to $270.5 million in the quarter mainly due to 2.2% decline in revenues from Home Health sub-segment. The sub-segment was affected by lower episodic admissions. Nevertheless, the decline was partly mitigated by 5.4% rise in Hospice sub-segment revenues driven by rise in same-store admissions.
Adjusted EBITDA of $50.8 million rose 23.9% year over year in the quarter attributable to reduced cost per visit, which resulted from changes implemented in the clinician compensation model changes in May 2020 and prudent management of full-time staff’s overall productivity.
Financial Update
As of Mar 31, 2021, Encompass Health’s cash and cash equivalents of $223.9 million remained unchanged from 2020-end figure.
Long-term debt, net of current portion as of Mar 31, 2021, declined 2.8% to $3.2 billion from the level at 2020 end.
In the first quarter, adjusted free cash flow climbed 44% year over year to $107.4 million.
2021 Guidance Updated
Concurrent with first-quarter results, the company revised its full-year outlook for 2021. This can be attributed to strong first-quarter 2021 results and expanded suspension of sequestration.
Since the company has not yet arrived on a final decision regarding the home health and hospice business, it has taken the existing business structure into consideration while laying down expectations.
For the current year, management anticipates net operating revenues to be $5.06-$5.23 billion higher than the previous guidance of $5-$5.17 billion.
In 2021, the company’s adjusted EBITDA is expected to lie in the range of $1 billion to $1.03 billion, up from the prior guidance of $925-$955 million.
Adjusted earnings per share from continuing operations is expected to be $3.94-$4.16 in 2021, higher than the previous guidance of $3.31-$3.53.
Zacks Rank
Encompass Health currently carries a Zacks Rank #3 (Hold). 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 first-quarter results so far, the bottom line of Tenet Healthcare Corporation (THC - Free Report) , Universal Health Services, Inc. (UHS - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) beat the Zacks Consensus Estimate.
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.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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