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Pediatrix (MD) Down 4.2% Despite Q1 Earnings & Revenue Beat
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Pediatrix Medical Group, Inc. (MD - Free Report) shares declined 4.2% since it reported its first-quarter results on May 2. Even though its better-than-expected quarterly results reflected strong patient volumes and lower G&A costs, investors are likely concerned about the company’s lower enrollment in commercial insurance programs, escalating practice salaries and benefits, and net borrowings.
Pediatrix reported first-quarter 2023 adjusted earnings of 23 cents per share, which beat the Zacks Consensus Estimate by a penny and our estimate of 20 cents. However, the bottom line declined from 33 cents per share a year ago.
MD’s net revenues of $491 million rose from $482.2 million a year ago. The top line beat the consensus mark of $487 million and our estimate of $479.3 million.
Pediatrix Medical Group, Inc. Price, Consensus and EPS Surprise
Overall same-unit revenues rose 2% year over year in the quarter under review thanks to increased patient volumes, partially offset by acquisition activity impact. Same-unit revenues attributable to patient volume inched up 1.6% year over year.
Total operating expenses increased 4% year over year to $461 million, higher than our estimate of $451.2 million, due to an escalation in practice salaries and benefits, and supplies and other operating expenses. General and administrative (G&A) expenses of $59.1 million dropped from $61.3 million, courtesy of cost savings resulting from net staffing reductions.
Interest expenses decreased to $10.4 million from $11.8 million a year ago, attributable to a declining debt level from the refinancing transactions of Pediatrix closed in the year-ago quarter.
Adjusted EBITDA of $40.1 million tumbled from $50.7 million a year ago, primarily due to funds received in the year-ago period from the provider relief fund.
At the first quarter-end, the company had $4.7 million remaining funds for share buybacks.
Financial Update (as of Mar 31, 2023)
Pediatrix exited the first quarter with cash and cash equivalents of $6.1 million, which declined from the 2022-end figure of $9.8 million.
Total assets of nearly $2,320.1 million decreased from $2,347.9 million at 2022-end.
Total debt, net, amounted to $757.7 million, up from $651.3 million at 2022-end.
Total equity of $909.8 million increased from $891.6 million at 2022-end.
In the first quarter, net cash used in operating activities increased to $100.9 million from $97.5 million a year ago.
2023 View
For 2023, management reiterated adjusted EBITDA guidance to $235-$245 million compared with $241 million in 2022. Also, it still expects depreciation and amortization expenses to be $38 million while interest expenses are projected in the range of $40-42.2 million.
Zacks Rank & Stocks to Consider
Pediatrix currently carries a Zacks Rank #4 (Sell).
The Zacks Consensus Estimate for DermTech’s 2023 earnings predicts 11.9% year-over-year growth. Also, the consensus estimate for DMTK’s revenues in 2023 suggests a 43% year-over-year rise.
The consensus mark for Viemed’s 2023 earnings indicates an 87.5% year-over-year increase. Furthermore, the consensus estimate for VMD’s revenues in 2023 suggests 15% year-over-year growth.
The Zacks Consensus Estimate for COMPASS Pathways’ 2023 earnings has improved 1% in the past 60 days. CMPS beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 16.8%.
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Pediatrix (MD) Down 4.2% Despite Q1 Earnings & Revenue Beat
Pediatrix Medical Group, Inc. (MD - Free Report) shares declined 4.2% since it reported its first-quarter results on May 2. Even though its better-than-expected quarterly results reflected strong patient volumes and lower G&A costs, investors are likely concerned about the company’s lower enrollment in commercial insurance programs, escalating practice salaries and benefits, and net borrowings.
Pediatrix reported first-quarter 2023 adjusted earnings of 23 cents per share, which beat the Zacks Consensus Estimate by a penny and our estimate of 20 cents. However, the bottom line declined from 33 cents per share a year ago.
MD’s net revenues of $491 million rose from $482.2 million a year ago. The top line beat the consensus mark of $487 million and our estimate of $479.3 million.
Pediatrix Medical Group, Inc. Price, Consensus and EPS Surprise
Pediatrix Medical Group, Inc. price-consensus-eps-surprise-chart | Pediatrix Medical Group, Inc. Quote
Q1 Update
Overall same-unit revenues rose 2% year over year in the quarter under review thanks to increased patient volumes, partially offset by acquisition activity impact. Same-unit revenues attributable to patient volume inched up 1.6% year over year.
Total operating expenses increased 4% year over year to $461 million, higher than our estimate of $451.2 million, due to an escalation in practice salaries and benefits, and supplies and other operating expenses. General and administrative (G&A) expenses of $59.1 million dropped from $61.3 million, courtesy of cost savings resulting from net staffing reductions.
Interest expenses decreased to $10.4 million from $11.8 million a year ago, attributable to a declining debt level from the refinancing transactions of Pediatrix closed in the year-ago quarter.
Adjusted EBITDA of $40.1 million tumbled from $50.7 million a year ago, primarily due to funds received in the year-ago period from the provider relief fund.
At the first quarter-end, the company had $4.7 million remaining funds for share buybacks.
Financial Update (as of Mar 31, 2023)
Pediatrix exited the first quarter with cash and cash equivalents of $6.1 million, which declined from the 2022-end figure of $9.8 million.
Total assets of nearly $2,320.1 million decreased from $2,347.9 million at 2022-end.
Total debt, net, amounted to $757.7 million, up from $651.3 million at 2022-end.
Total equity of $909.8 million increased from $891.6 million at 2022-end.
In the first quarter, net cash used in operating activities increased to $100.9 million from $97.5 million a year ago.
2023 View
For 2023, management reiterated adjusted EBITDA guidance to $235-$245 million compared with $241 million in 2022. Also, it still expects depreciation and amortization expenses to be $38 million while interest expenses are projected in the range of $40-42.2 million.
Zacks Rank & Stocks to Consider
Pediatrix currently carries a Zacks Rank #4 (Sell).
Investors interested in the broader medical space may look at better-ranked players like DermTech, Inc. (DMTK - Free Report) , Viemed Healthcare, Inc. (VMD - Free Report) and COMPASS Pathways plc (CMPS - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for DermTech’s 2023 earnings predicts 11.9% year-over-year growth. Also, the consensus estimate for DMTK’s revenues in 2023 suggests a 43% year-over-year rise.
The consensus mark for Viemed’s 2023 earnings indicates an 87.5% year-over-year increase. Furthermore, the consensus estimate for VMD’s revenues in 2023 suggests 15% year-over-year growth.
The Zacks Consensus Estimate for COMPASS Pathways’ 2023 earnings has improved 1% in the past 60 days. CMPS beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 16.8%.