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AMN Healthcare Services, Inc. (AMN - Free Report) delivered adjusted earnings per share (EPS) of $2.48 in the fourth quarter of 2022, which declined 15.9% year over year. However, the figure surpassed the Zacks Consensus Estimate by 14.3%.
Our projection of adjusted EPS was $2.03.
GAAP EPS for the quarter was $1.88, reflecting a 22.3% plunge from the year-earlier figure.
Full-year adjusted EPS was $11.90, up 48.2% from the end of 2021. Our projection for full-year adjusted EPS was $11.40.
Revenues in Detail
AMN Healthcare registered revenues of $1.13 billion in the fourth quarter, down 17.4% year over year. However, the figure surpassed the Zacks Consensus Estimate by 5.8%.
The fourth-quarter revenue compares to our estimate of $1.05 billion.
Robust performances by the majority of the segments significantly drove the fourth-quarter revenues.
Full-year revenues were $5.24 billion, reflecting a 31.6% improvement from the comparable 2021 period. Our projection for full-year revenues was $5.17 billion.
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 fourth quarter of 2022, the Nurse and Allied Solutions segment’s revenues totaled $824.6 million, down 23.8% year over year. Travel Nurse revenues were down 24% year over year, whereas Allied revenues rose by 6% year over year.
This figure compares to our Nurse and Allied Solutions segment’s fourth-quarter projection of $766.1 million.
The Physician and Leadership Solutions segment’s revenues totaled $167.6 million, up 2.4% year over year. This upside was on the back of 4% growth in locum tenens revenues, which amounted to $103 million. Interim leadership revenues were up 4% year over year. Physician and leadership search businesses saw revenue decline by 10% year over year.
This figure compares to our Physician and Leadership Solutions segment’s fourth-quarter projection of $163.7 million.
The Technology and Workforce Solutions segment’s revenues totaled $133.3 million, up 13.5% year over year. Language interpretation services business revenues came in at $58 million in the quarter (up 23% year over year), while the vendor management systems business saw 5% year-over-year revenue growth to reach $55 million.
This figure compares to our Technology and Workforce Solutions segment’s fourth-quarter projection of $120.5 million.
AMN Healthcare Services, Inc. Price, Consensus and EPS Surprise
In the quarter under review, AMN Healthcare’s gross profit fell 13.6% to $375.3 million. However, the gross margin expanded 148 basis points (bps) to 33.3%.
We had projected a 33.8% of gross margin for the fourth quarter.
Selling, general & administrative expenses fell 8.2% to $219.1 million. Adjusted operating profit totaled $156.1 million, reflecting a 20.2% decline from the prior-year quarter. The adjusted operating margin in the fourth quarter contracted 48 bps to 13.9%.
Financial Position
AMN Healthcare exited the full-year 2022 with cash and cash equivalents of $64.5 million compared with $180.9 million at the end of 2021. Total debt at the end of 2022 was $850 million, which is flat compared with the end of 2021.
Cumulative net cash flow provided by operating activities at the end of 2022 was $653.7 million compared with $305.4 million a year ago.
Guidance
AMN Healthcare has provided its financial outlook for the first quarter of 2023.
For the first quarter, the company expects revenues to be $1.100-$1.130 billion, reflecting a decline of 27-29% compared with the prior-year figure. The Zacks Consensus Estimate for the same stands at $1.09 billion.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to decline 32-34% from the prior-year figure and remain flat sequentially. The Technology and Workforce Solutions segment’s revenues are expected to decline 10-12% from the prior-year figure.
The company projects first-quarter revenues at the Physician and Leadership Solutions segment to decline 10-12% from the prior-year figure.
Our Take
AMN Healthcare exited the fourth quarter of 2022 with better-than-expected results. The company recorded robust performance across the majority of its core segments in the quarter.
Management confirmed that high vacancies and voluntary turnover in healthcare are continuing to support demand for AMN Healthcare’s total talent solutions. Management also confirmed that despite tough year-over-year comparisons, the company’s fourth quarter results exceeded its expectations for all business segments.
The continued strength in AMN Healthcare’s Language Services also looks promising. The expansion of the gross margin bodes well for the stock.
However, AMN Healthcare’s dismal top line and bottom-line performances are disappointing. The Nurse and Allied Solutions segment’s revenue decline during the reported quarter is worrying. The contraction of the adjusted operating margin raises our apprehension about the stock.
AMN Healthcare expects to register a decline in its overall top line and all its segments in the first quarter of 2023, which is concerning. The company’s reliance on third parties and operation in a stiff competitive space are other headwinds.
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 that have announced quarterly results are Cardinal Health, Inc. (CAH - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Cardinal Health, carrying a Zacks Rank #2, reported second-quarter fiscal 2023 adjusted EPS of $1.32, beating the Zacks Consensus Estimate by 16.8%. Revenues of $51.47 billion outpaced the consensus mark by 2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 6.4%.
McKesson, having a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.
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AMN Healthcare (AMN) Q4 Earnings, Revenues Beat Estimates
AMN Healthcare Services, Inc. (AMN - Free Report) delivered adjusted earnings per share (EPS) of $2.48 in the fourth quarter of 2022, which declined 15.9% year over year. However, the figure surpassed the Zacks Consensus Estimate by 14.3%.
Our projection of adjusted EPS was $2.03.
GAAP EPS for the quarter was $1.88, reflecting a 22.3% plunge from the year-earlier figure.
Full-year adjusted EPS was $11.90, up 48.2% from the end of 2021. Our projection for full-year adjusted EPS was $11.40.
Revenues in Detail
AMN Healthcare registered revenues of $1.13 billion in the fourth quarter, down 17.4% year over year. However, the figure surpassed the Zacks Consensus Estimate by 5.8%.
The fourth-quarter revenue compares to our estimate of $1.05 billion.
Robust performances by the majority of the segments significantly drove the fourth-quarter revenues.
Full-year revenues were $5.24 billion, reflecting a 31.6% improvement from the comparable 2021 period. Our projection for full-year revenues was $5.17 billion.
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 fourth quarter of 2022, the Nurse and Allied Solutions segment’s revenues totaled $824.6 million, down 23.8% year over year. Travel Nurse revenues were down 24% year over year, whereas Allied revenues rose by 6% year over year.
This figure compares to our Nurse and Allied Solutions segment’s fourth-quarter projection of $766.1 million.
The Physician and Leadership Solutions segment’s revenues totaled $167.6 million, up 2.4% year over year. This upside was on the back of 4% growth in locum tenens revenues, which amounted to $103 million. Interim leadership revenues were up 4% year over year. Physician and leadership search businesses saw revenue decline by 10% year over year.
This figure compares to our Physician and Leadership Solutions segment’s fourth-quarter projection of $163.7 million.
The Technology and Workforce Solutions segment’s revenues totaled $133.3 million, up 13.5% year over year. Language interpretation services business revenues came in at $58 million in the quarter (up 23% year over year), while the vendor management systems business saw 5% year-over-year revenue growth to reach $55 million.
This figure compares to our Technology and Workforce Solutions segment’s fourth-quarter projection of $120.5 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 fell 13.6% to $375.3 million. However, the gross margin expanded 148 basis points (bps) to 33.3%.
We had projected a 33.8% of gross margin for the fourth quarter.
Selling, general & administrative expenses fell 8.2% to $219.1 million.
Adjusted operating profit totaled $156.1 million, reflecting a 20.2% decline from the prior-year quarter. The adjusted operating margin in the fourth quarter contracted 48 bps to 13.9%.
Financial Position
AMN Healthcare exited the full-year 2022 with cash and cash equivalents of $64.5 million compared with $180.9 million at the end of 2021. Total debt at the end of 2022 was $850 million, which is flat compared with the end of 2021.
Cumulative net cash flow provided by operating activities at the end of 2022 was $653.7 million compared with $305.4 million a year ago.
Guidance
AMN Healthcare has provided its financial outlook for the first quarter of 2023.
For the first quarter, the company expects revenues to be $1.100-$1.130 billion, reflecting a decline of 27-29% compared with the prior-year figure. The Zacks Consensus Estimate for the same stands at $1.09 billion.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to decline 32-34% from the prior-year figure and remain flat sequentially. The Technology and Workforce Solutions segment’s revenues are expected to decline 10-12% from the prior-year figure.
The company projects first-quarter revenues at the Physician and Leadership Solutions segment to decline 10-12% from the prior-year figure.
Our Take
AMN Healthcare exited the fourth quarter of 2022 with better-than-expected results. The company recorded robust performance across the majority of its core segments in the quarter.
Management confirmed that high vacancies and voluntary turnover in healthcare are continuing to support demand for AMN Healthcare’s total talent solutions. Management also confirmed that despite tough year-over-year comparisons, the company’s fourth quarter results exceeded its expectations for all business segments.
The continued strength in AMN Healthcare’s Language Services also looks promising. The expansion of the gross margin bodes well for the stock.
However, AMN Healthcare’s dismal top line and bottom-line performances are disappointing. The Nurse and Allied Solutions segment’s revenue decline during the reported quarter is worrying. The contraction of the adjusted operating margin raises our apprehension about the stock.
AMN Healthcare expects to register a decline in its overall top line and all its segments in the first quarter of 2023, which is concerning. The company’s reliance on third parties and operation in a stiff competitive space are other headwinds.
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 that have announced quarterly results are Cardinal Health, Inc. (CAH - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Cardinal Health, carrying a Zacks Rank #2, reported second-quarter fiscal 2023 adjusted EPS of $1.32, beating the Zacks Consensus Estimate by 16.8%. Revenues of $51.47 billion outpaced the consensus mark by 2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 6.4%.
McKesson, having a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.