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Ensign Group (ENSG) Beats on Q1 Earnings, Hikes '23 EPS View
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The Ensign Group, Inc. (ENSG - Free Report) reported first-quarter 2023 adjusted operating earnings of $1.13 per share, which outpaced the Zacks Consensus Estimate by 2.7% and our estimate of $1.08. The bottom line climbed 14.1% year over year.
Operating revenues amounted to $886.8 million, which rose 24.3% year over year in the quarter under review. The top line beat the consensus mark by 4.8%. The metric benefited from improved skilled services and rental revenues.
Despite reporting better-than-expected earnings, its shares lost 3.6% on Apr 27. An elevated expense level is expected to have acted as a drag on ENSG’s results. Nevertheless, the quarterly results were aided by solid segmental contributions and growing patient volumes.
The Ensign Group, Inc. Price, Consensus and EPS Surprise
ENSG reported an adjusted net income of $64.6 million in the first quarter, which improved 14.6% year over year.
Same-store occupancy grew 4.2% year over year, while transitioning occupancy increased 5.4% year over year.
Total expenses of $812 million escalated 26% year over year in the quarter under review and beat our estimate of $765.3 million. The year-over-year increase resulted from the higher cost of services, rent-cost of services, general and administrative expenses, and depreciation and amortization.
Segmental Update
Skilled Services: The segment’s revenues of $850.9 million climbed 23.9% year over year. Segmental income grew 15.4% year over year to $113.3 million in the first quarter.
Skilled nursing and campus operations of the segment totaled 253 and 26, respectively, at the first-quarter end.
Standard Bearer: Rental revenues were $19.7 million in the segment, which rose 14.7% year over year. Segmental income of $7.2 million increased 4.6% year over year.
Funds from Operations (FFO) grew 10.6% year over year to $13.2 million in the quarter under review.
Financial Update (as of Mar 31, 2023)
Ensign Group exited the first quarter with cash and cash equivalents of $327 million, which increased 3.4% from the 2022-end level.
Total assets of $3,862.2 million grew 11.9% from the figure at 2022 end.
Long-term debt-less current maturities amounted to $148.3 million. The figure dipped 0.6% from the figure as of Dec 31, 2022. Short-term debt totaled $3.9 million.
Total equity of $1,319.8 million rose 5.7% from the 2022-end figure.
In the reported quarter, ENSG generated operating cash flows of $48.3 million, which increased 5.4% year over year.
Capital-Deployment Update
Ensign Group did not buy back shares in the first quarter as part of the share repurchase program authorized by management in July 2022.
It paid out a quarterly dividend of 5.75 cents per share.
2023 Outlook
Revenues are anticipated between $3.68 billion and $3.73 billion, up from the prior mentioned $3.55-$3.62 billion. The mid-point of the revised guidance indicates an improvement of 22.5% from the 2022 figure.
Earnings per share are forecast to be $4.64-$4.77 this year, higher than the earlier mentioned $4.60-$4.74. The mid-point of the updated outlook suggests 13.8% growth from the reported figure of 2022.
The weighted average common shares outstanding is estimated at 57.7 million.
Of the Medical sector players that have reported first-quarter 2023 results so far, the bottom-line results of Molina Healthcare, Inc. (MOH - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Baxter International Inc. (BAX - Free Report) beat the Zacks Consensus Estimate.
Molina Healthcare reported first-quarter 2023 adjusted earnings per share of $5.81, which beat the Zacks Consensus Estimate by 13.3% and our estimate of $5.14. The bottom line improved 18.6% year over year. Total revenues of $8,149 million improved 4.9% year over year in the quarter under review. However, the top line missed the consensus mark by 1% and our estimate of $8,218.2 million. MOH’s premium revenues were $7,885 million, which rose 4.7% year over year. It reported a net income of $321 million, which soared 24.4% year over year in the quarter under review. The consolidated medical care ratio or MCR came in at 87.1%.
West Pharmaceuticals delivered adjusted EPS of $1.98 in the first quarter of 2023, down 13.9% year over year. However, the figure beat the Zacks Consensus Estimate by 18.7%. WST registered net sales of $716.6 million in the first quarter, down 0.5% year over year. The figure, however, beat the Zacks Consensus Estimate by 2.8%. In the quarter under review, adjusted operating profit totaled $158.7 million, indicating a decline of 16.1% from the prior-year quarter. The adjusted operating margin in the first quarter contracted 350 bps to 22.4%.
Baxter reported first-quarter 2023 adjusted EPS of 59 cents, which beat the Zacks Consensus Estimate of 48 cents. However, the bottom line declined 37% from the year-ago quarter’s level. Revenues of $3.65 billion beat the Zacks Consensus Estimate of $3.6 billion. The top line declined 2% year over year on a reported basis but improved 2% on a constant currency (cc) basis. In the reported quarter, Patient Support Systems reported revenues of $348 million, while Front Line Care and Surgical Solutions recorded revenues of $302 million and $81 million, respectively. BAX’s adjusted operating income was $503 million, down 24.5% year over year.
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Ensign Group (ENSG) Beats on Q1 Earnings, Hikes '23 EPS View
The Ensign Group, Inc. (ENSG - Free Report) reported first-quarter 2023 adjusted operating earnings of $1.13 per share, which outpaced the Zacks Consensus Estimate by 2.7% and our estimate of $1.08. The bottom line climbed 14.1% year over year.
Operating revenues amounted to $886.8 million, which rose 24.3% year over year in the quarter under review. The top line beat the consensus mark by 4.8%. The metric benefited from improved skilled services and rental revenues.
Despite reporting better-than-expected earnings, its shares lost 3.6% on Apr 27. An elevated expense level is expected to have acted as a drag on ENSG’s results. Nevertheless, the quarterly results were aided by solid segmental contributions and growing patient volumes.
The Ensign Group, Inc. Price, Consensus and EPS Surprise
The Ensign Group, Inc. price-consensus-eps-surprise-chart | The Ensign Group, Inc. Quote
Q1 Update
ENSG reported an adjusted net income of $64.6 million in the first quarter, which improved 14.6% year over year.
Same-store occupancy grew 4.2% year over year, while transitioning occupancy increased 5.4% year over year.
Total expenses of $812 million escalated 26% year over year in the quarter under review and beat our estimate of $765.3 million. The year-over-year increase resulted from the higher cost of services, rent-cost of services, general and administrative expenses, and depreciation and amortization.
Segmental Update
Skilled Services: The segment’s revenues of $850.9 million climbed 23.9% year over year. Segmental income grew 15.4% year over year to $113.3 million in the first quarter.
Skilled nursing and campus operations of the segment totaled 253 and 26, respectively, at the first-quarter end.
Standard Bearer: Rental revenues were $19.7 million in the segment, which rose 14.7% year over year. Segmental income of $7.2 million increased 4.6% year over year.
Funds from Operations (FFO) grew 10.6% year over year to $13.2 million in the quarter under review.
Financial Update (as of Mar 31, 2023)
Ensign Group exited the first quarter with cash and cash equivalents of $327 million, which increased 3.4% from the 2022-end level.
Total assets of $3,862.2 million grew 11.9% from the figure at 2022 end.
Long-term debt-less current maturities amounted to $148.3 million. The figure dipped 0.6% from the figure as of Dec 31, 2022. Short-term debt totaled $3.9 million.
Total equity of $1,319.8 million rose 5.7% from the 2022-end figure.
In the reported quarter, ENSG generated operating cash flows of $48.3 million, which increased 5.4% year over year.
Capital-Deployment Update
Ensign Group did not buy back shares in the first quarter as part of the share repurchase program authorized by management in July 2022.
It paid out a quarterly dividend of 5.75 cents per share.
2023 Outlook
Revenues are anticipated between $3.68 billion and $3.73 billion, up from the prior mentioned $3.55-$3.62 billion. The mid-point of the revised guidance indicates an improvement of 22.5% from the 2022 figure.
Earnings per share are forecast to be $4.64-$4.77 this year, higher than the earlier mentioned $4.60-$4.74. The mid-point of the updated outlook suggests 13.8% growth from the reported figure of 2022.
The weighted average common shares outstanding is estimated at 57.7 million.
Zacks Rank
Ensign Group 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 have reported first-quarter 2023 results so far, the bottom-line results of Molina Healthcare, Inc. (MOH - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Baxter International Inc. (BAX - Free Report) beat the Zacks Consensus Estimate.
Molina Healthcare reported first-quarter 2023 adjusted earnings per share of $5.81, which beat the Zacks Consensus Estimate by 13.3% and our estimate of $5.14. The bottom line improved 18.6% year over year. Total revenues of $8,149 million improved 4.9% year over year in the quarter under review. However, the top line missed the consensus mark by 1% and our estimate of $8,218.2 million. MOH’s premium revenues were $7,885 million, which rose 4.7% year over year. It reported a net income of $321 million, which soared 24.4% year over year in the quarter under review. The consolidated medical care ratio or MCR came in at 87.1%.
West Pharmaceuticals delivered adjusted EPS of $1.98 in the first quarter of 2023, down 13.9% year over year. However, the figure beat the Zacks Consensus Estimate by 18.7%. WST registered net sales of $716.6 million in the first quarter, down 0.5% year over year. The figure, however, beat the Zacks Consensus Estimate by 2.8%. In the quarter under review, adjusted operating profit totaled $158.7 million, indicating a decline of 16.1% from the prior-year quarter. The adjusted operating margin in the first quarter contracted 350 bps to 22.4%.
Baxter reported first-quarter 2023 adjusted EPS of 59 cents, which beat the Zacks Consensus Estimate of 48 cents. However, the bottom line declined 37% from the year-ago quarter’s level. Revenues of $3.65 billion beat the Zacks Consensus Estimate of $3.6 billion. The top line declined 2% year over year on a reported basis but improved 2% on a constant currency (cc) basis. In the reported quarter, Patient Support Systems reported revenues of $348 million, while Front Line Care and Surgical Solutions recorded revenues of $302 million and $81 million, respectively. BAX’s adjusted operating income was $503 million, down 24.5% year over year.