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AMN Healthcare Services Inc. (AMN - Free Report) delivered adjusted earnings per share (“EPS”) of $3.49 in the first quarter of 2022, which surged 105.3% year over year. The figure surpassed the Zacks Consensus Estimate by 7.4%.
GAAP EPS for the quarter was $3.09, reflecting a huge 110.2% surge from the year-earlier figure.
Revenues in Detail
AMN Healthcare registered revenues of $1.55 billion in the first quarter, up 75.2% year over year. The figure surpassed the Zacks Consensus Estimate by 3.7%.
AMN Healthcare conducts its business via three reportable segments — Nurse and Allied Solutions, Physician and Leadership Solutions, and Technology and Workforce Solutions.
In the first quarter of 2022, the Nurse and Allied Solutions segment’s revenues totaled $1.23 billion, up 87% year over year. Travel nurse staffing revenues grew 95% year over year, whereas allied division revenues rose 64% year over year.
The Physician and Leadership Solutions segment’s revenues totaled $179.5 million, up 27.5% year over year. This upside was on 30% growth in locum tenens revenues, which amounted to $113 million. Interim leadership revenues were up 14% year over year. Physician and leadership search businesses saw revenue growth of 46% year over year.
The Technology and Workforce Solutions segment’s revenues totaled $144.9 million, up 63.8% year over year. Language services business revenues came in at $49 million in the quarter (up 20% year over year), while the vendor management systems business saw 136% year-over-year revenue growth to reach $75 million.
AMN Healthcare Services Inc Price, Consensus and EPS Surprise
In the quarter under review, AMN Healthcare’s gross profit rose 71.8% to $496.2 million. However, gross margin contracted 65 basis points (bps) to 31.9%.
Selling, general & administrative expenses rose 59.8% to $257.6 million.
Adjusted operating profit totaled $238.6 million, reflecting an 86.9% surge from the prior-year quarter. Adjusted operating margin in the first quarter expanded 96 bps to 15.4%.
Financial Position
AMN Healthcare exited the first quarter of 2022 with cash and cash equivalents of $113.5 million compared with $180.9 million at the end of 2021. Total debt at the end of the first quarter of 2021 was $850 million, flat compared with that at the end of 2021.
Net cash flow from operating activities at the end of the first quarter was $200.2 million compared with $39.1 million a year ago.
During the first quarter, AMN Healthcare used $228 million of cash to repurchase 2.3 million shares of its stock. As of Mar 31, 2022, $250 million remained under the company’s stock repurchase authorization.
Guidance
AMN Healthcare has provided its financial outlook for the second quarter of 2022.
For the second quarter, the company expects revenues to be $1.340-$1.380 billion, reflecting growth of 56-61% compared with the prior-year figure. The Zacks Consensus Estimate for the same stands at $1.18 billion.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to grow around 57-60% from the prior-year figure, excluding labor disruption. The Technology and Workforce Solutions segment’s revenues are expected to grow almost 45% from the prior-year figure.
The company projects second-quarter revenues at the Physician and Leadership Solutions segment to improve almost 20% from the prior-year figure.
Our Take
AMN Healthcare exited the first quarter with better-than-expected results. The company recorded robust performance across each of its core segments, along with surge in its top and bottom lines in the quarter. Per management, a tight labor market has created record-high demand in many areas of the company’s business, which is encouraging. Expansion of adjusted operating margin also bodes well for the stock.
However, gross margin contraction raises our apprehensions about the stock. The company’s reliance on third parties and operation in a stiff competitive space are discouraging.
Zacks Rank and Other Key Picks
AMN Healthcare currently carries a Zacks Rank #2 (Buy).
A few other stocks that investors can consider in the broader medical space, and which have announced quarterly results are Omnicell, Inc. (OMCL - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and Alkermes plc (ALKS - Free Report) .
Omnicell, carrying a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of 83 cents, which beat the Zacks Consensus Estimate by 16.9%. Revenues of $318.8 million outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Omnicell has an estimated long-term growth rate of 16%. OMCL’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 13.4%.
UnitedHealth, having a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 1.9%.
UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently carries a Zacks Rank #2.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.
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AMN Healthcare (AMN) Q1 Earnings, Revenues Beat Estimates
AMN Healthcare Services Inc. (AMN - Free Report) delivered adjusted earnings per share (“EPS”) of $3.49 in the first quarter of 2022, which surged 105.3% year over year. The figure surpassed the Zacks Consensus Estimate by 7.4%.
GAAP EPS for the quarter was $3.09, reflecting a huge 110.2% surge from the year-earlier figure.
Revenues in Detail
AMN Healthcare registered revenues of $1.55 billion in the first quarter, up 75.2% year over year. The figure surpassed the Zacks Consensus Estimate by 3.7%.
Robust segmental performances significantly drove first-quarter revenues.
Segment Details
AMN Healthcare conducts its business via three reportable segments — Nurse and Allied Solutions, Physician and Leadership Solutions, and Technology and Workforce Solutions.
In the first quarter of 2022, the Nurse and Allied Solutions segment’s revenues totaled $1.23 billion, up 87% year over year. Travel nurse staffing revenues grew 95% year over year, whereas allied division revenues rose 64% year over year.
The Physician and Leadership Solutions segment’s revenues totaled $179.5 million, up 27.5% year over year. This upside was on 30% growth in locum tenens revenues, which amounted to $113 million. Interim leadership revenues were up 14% year over year. Physician and leadership search businesses saw revenue growth of 46% year over year.
The Technology and Workforce Solutions segment’s revenues totaled $144.9 million, up 63.8% year over year. Language services business revenues came in at $49 million in the quarter (up 20% year over year), while the vendor management systems business saw 136% year-over-year revenue growth to reach $75 million.
AMN Healthcare Services Inc Price, Consensus and EPS Surprise
AMN Healthcare Services Inc price-consensus-eps-surprise-chart | AMN Healthcare Services Inc Quote
Margin Trend
In the quarter under review, AMN Healthcare’s gross profit rose 71.8% to $496.2 million. However, gross margin contracted 65 basis points (bps) to 31.9%.
Selling, general & administrative expenses rose 59.8% to $257.6 million.
Adjusted operating profit totaled $238.6 million, reflecting an 86.9% surge from the prior-year quarter. Adjusted operating margin in the first quarter expanded 96 bps to 15.4%.
Financial Position
AMN Healthcare exited the first quarter of 2022 with cash and cash equivalents of $113.5 million compared with $180.9 million at the end of 2021. Total debt at the end of the first quarter of 2021 was $850 million, flat compared with that at the end of 2021.
Net cash flow from operating activities at the end of the first quarter was $200.2 million compared with $39.1 million a year ago.
During the first quarter, AMN Healthcare used $228 million of cash to repurchase 2.3 million shares of its stock. As of Mar 31, 2022, $250 million remained under the company’s stock repurchase authorization.
Guidance
AMN Healthcare has provided its financial outlook for the second quarter of 2022.
For the second quarter, the company expects revenues to be $1.340-$1.380 billion, reflecting growth of 56-61% compared with the prior-year figure. The Zacks Consensus Estimate for the same stands at $1.18 billion.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to grow around 57-60% from the prior-year figure, excluding labor disruption. The Technology and Workforce Solutions segment’s revenues are expected to grow almost 45% from the prior-year figure.
The company projects second-quarter revenues at the Physician and Leadership Solutions segment to improve almost 20% from the prior-year figure.
Our Take
AMN Healthcare exited the first quarter with better-than-expected results. The company recorded robust performance across each of its core segments, along with surge in its top and bottom lines in the quarter. Per management, a tight labor market has created record-high demand in many areas of the company’s business, which is encouraging. Expansion of adjusted operating margin also bodes well for the stock.
However, gross margin contraction raises our apprehensions about the stock. The company’s reliance on third parties and operation in a stiff competitive space are discouraging.
Zacks Rank and Other Key Picks
AMN Healthcare currently carries a Zacks Rank #2 (Buy).
A few other stocks that investors can consider in the broader medical space, and which have announced quarterly results are Omnicell, Inc. (OMCL - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and Alkermes plc (ALKS - Free Report) .
Omnicell, carrying a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of 83 cents, which beat the Zacks Consensus Estimate by 16.9%. Revenues of $318.8 million outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Omnicell has an estimated long-term growth rate of 16%. OMCL’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 13.4%.
UnitedHealth, having a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 1.9%.
UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently carries a Zacks Rank #2.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.