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AMN Healthcare (AMN) Q2 Earnings and Revenues Beat Estimates
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AMN Healthcare Services, Inc. (AMN - Free Report) delivered adjusted earnings per share (EPS) of $2.38 in the second quarter of 2023, which declined 28.1% year over year. However, the figure surpassed the Zacks Consensus Estimate by 10.7%.
GAAP EPS for the quarter was $1.55, reflecting a 44% plunge from the year-earlier figure.
Revenues in Detail
AMN Healthcare registered revenues of $991.3 million in the second quarter, down 30.5% year over year. However, the figure surpassed the Zacks Consensus Estimate by 0.4%.
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 second quarter of 2023, the Nurse and Allied Solutions segment’s revenues totaled $689 million, down 37.4% year over year. Travel nurse staffing revenues were down 38% year over year, whereas Allied revenues declined 12% year over year. This figure compares to our Nurse and Allied Solutions segment’s second-quarter projection of $690.1 million.
The Physician and Leadership Solutions segment’s revenues totaled $176.2 million, up 0.3% year over year. This primarily resulted from a 15% uptick in locum tenens revenues, which amounted to $122 million. Interim leadership revenues were down 24% year over year. Physician and leadership search businesses saw revenue decline by 19% year over year. This figure compares to our Physician and Leadership Solutions segment’s second-quarter projection of $167.3 million.
The Technology and Workforce Solutions segment’s revenues totaled $126.1 million, down 15.6% year over year. Language interpretation services business revenues came in at $64 million in the quarter (up 19% year over year), while the vendor management systems business saw a 38% year-over-year revenue decline to reach $47 million. This figure compares to our Technology and Workforce Solutions segment’s second-quarter projection of $129 million.
AMN Healthcare Services Inc Price, Consensus and EPS Surprise
In the quarter under review, AMN Healthcare’s gross profit fell 28.2% to $330.3 million. However, the gross margin expanded 106 basis points (bps) to 33.3%.
We had projected 33.5% of gross margin for the second quarter.
Selling, general & administrative expenses fell 17.5% to $201.8 million.
Adjusted operating profit totaled $128.5 million, reflecting a 40.5% decline from the prior-year quarter. The adjusted operating margin in the second quarter contracted 216 bps to 12.9%.
Financial Position
AMN Healthcare exited second-quarter 2023 with cash and cash equivalents of $7 million compared with $28.5 million at the end of the first quarter. Total debt at the end of second-quarter 2023 was $1.00 billion compared with $990 million at the end of the first quarter.
Cumulative net cash flow provided by operating activities at the end of second-quarter 2023 was $241.1 million compared with $424.7 million a year ago.
Guidance
AMN Healthcare has provided its financial outlook for the third quarter of 2023.
For the third quarter, the company expects revenues to be $840 million-$860 million, reflecting a decline of 24-26% compared with the prior-year figure. The Zacks Consensus Estimate for the same stands at $934.1 million.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to decline 31-33% from the prior-year figure. The Technology and Workforce Solutions segment’s revenues are expected to decline 10-12% from the prior-year figure.
The company projects third-quarter revenues at the Physician and Leadership Solutions segment to decline 3-5% from the prior-year figure.
Our Take
AMN Healthcare exited the second quarter of 2023 with better-than-expected results. The uptick in Physician and Leadership Solutions segment’s revenues in the quarter was encouraging. The Technology and Workforce Solutions segment’s Language interpretation services business revenues also saw an improvement in the quarter, which was impressive. The gross margin expansion bodes well for the stock.
Management confirmed that the Nurse and Allied Solutions segment completed a major upgrade of its back-office technology platform to better serve AMN Healthcare’s internal growth objectives and its healthcare professionals. Management also confirmed that the company is currently investing in initiatives to make its services more tech-enabled and integrated. These look promising for the stock.
However, AMN Healthcare’s dismal top-line and bottom-line performances were disappointing. The decline in two of the segmental revenues during the reported quarter was 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 third quarter of 2023, which is concerning.
Zacks Rank and Key Picks
AMN Healthcare currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, Integer Holdings Corporation (ITGR - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
BD, carrying a Zacks Rank of 2 (Buy), reported third-quarter fiscal 2023 adjusted EPS of $2.96, beating the Zacks Consensus Estimate by 2.4%. Revenues of $4.88 billion outpaced the consensus mark by 1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BD has a long-term estimated growth rate of 10.1%. BDX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 4.7%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.
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AMN Healthcare (AMN) Q2 Earnings and Revenues Beat Estimates
AMN Healthcare Services, Inc. (AMN - Free Report) delivered adjusted earnings per share (EPS) of $2.38 in the second quarter of 2023, which declined 28.1% year over year. However, the figure surpassed the Zacks Consensus Estimate by 10.7%.
GAAP EPS for the quarter was $1.55, reflecting a 44% plunge from the year-earlier figure.
Revenues in Detail
AMN Healthcare registered revenues of $991.3 million in the second quarter, down 30.5% year over year. However, the figure surpassed the Zacks Consensus Estimate by 0.4%.
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 second quarter of 2023, the Nurse and Allied Solutions segment’s revenues totaled $689 million, down 37.4% year over year. Travel nurse staffing revenues were down 38% year over year, whereas Allied revenues declined 12% year over year. This figure compares to our Nurse and Allied Solutions segment’s second-quarter projection of $690.1 million.
The Physician and Leadership Solutions segment’s revenues totaled $176.2 million, up 0.3% year over year. This primarily resulted from a 15% uptick in locum tenens revenues, which amounted to $122 million. Interim leadership revenues were down 24% year over year. Physician and leadership search businesses saw revenue decline by 19% year over year. This figure compares to our Physician and Leadership Solutions segment’s second-quarter projection of $167.3 million.
The Technology and Workforce Solutions segment’s revenues totaled $126.1 million, down 15.6% year over year. Language interpretation services business revenues came in at $64 million in the quarter (up 19% year over year), while the vendor management systems business saw a 38% year-over-year revenue decline to reach $47 million. This figure compares to our Technology and Workforce Solutions segment’s second-quarter projection of $129 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 28.2% to $330.3 million. However, the gross margin expanded 106 basis points (bps) to 33.3%.
We had projected 33.5% of gross margin for the second quarter.
Selling, general & administrative expenses fell 17.5% to $201.8 million.
Adjusted operating profit totaled $128.5 million, reflecting a 40.5% decline from the prior-year quarter. The adjusted operating margin in the second quarter contracted 216 bps to 12.9%.
Financial Position
AMN Healthcare exited second-quarter 2023 with cash and cash equivalents of $7 million compared with $28.5 million at the end of the first quarter. Total debt at the end of second-quarter 2023 was $1.00 billion compared with $990 million at the end of the first quarter.
Cumulative net cash flow provided by operating activities at the end of second-quarter 2023 was $241.1 million compared with $424.7 million a year ago.
Guidance
AMN Healthcare has provided its financial outlook for the third quarter of 2023.
For the third quarter, the company expects revenues to be $840 million-$860 million, reflecting a decline of 24-26% compared with the prior-year figure. The Zacks Consensus Estimate for the same stands at $934.1 million.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to decline 31-33% from the prior-year figure. The Technology and Workforce Solutions segment’s revenues are expected to decline 10-12% from the prior-year figure.
The company projects third-quarter revenues at the Physician and Leadership Solutions segment to decline 3-5% from the prior-year figure.
Our Take
AMN Healthcare exited the second quarter of 2023 with better-than-expected results. The uptick in Physician and Leadership Solutions segment’s revenues in the quarter was encouraging. The Technology and Workforce Solutions segment’s Language interpretation services business revenues also saw an improvement in the quarter, which was impressive. The gross margin expansion bodes well for the stock.
Management confirmed that the Nurse and Allied Solutions segment completed a major upgrade of its back-office technology platform to better serve AMN Healthcare’s internal growth objectives and its healthcare professionals. Management also confirmed that the company is currently investing in initiatives to make its services more tech-enabled and integrated. These look promising for the stock.
However, AMN Healthcare’s dismal top-line and bottom-line performances were disappointing. The decline in two of the segmental revenues during the reported quarter was 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 third quarter of 2023, which is concerning.
Zacks Rank and Key Picks
AMN Healthcare currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, Integer Holdings Corporation (ITGR - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
BD, carrying a Zacks Rank of 2 (Buy), reported third-quarter fiscal 2023 adjusted EPS of $2.96, beating the Zacks Consensus Estimate by 2.4%. Revenues of $4.88 billion outpaced the consensus mark by 1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BD has a long-term estimated growth rate of 10.1%. BDX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 4.7%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.