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AMN Healthcare Services, Inc. (AMN - Free Report) delivered adjusted earnings per share (EPS) of 61 cents in the third quarter of 2024, which declined 69% year over year. However, the figure surpassed the Zacks Consensus Estimate by 5.2%.
GAAP EPS for the quarter was 18 cents, indicating an 87.1% plunge from the year-ago figure.
AMN’s Revenues in Detail
AMN Healthcare registered revenues of $687.5 million in the third quarter, down 19.4% year over year. However, the figure surpassed the Zacks Consensus Estimate by 2.6%.
Shares of this company lost nearly 6.5% in yesterday’s after-hours trading.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
AMN Healthcare’s 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 third quarter of 2024, the Nurse and Allied Solutions segment’s revenues totaled $399.4 million, down 30.4% year over year. Travel nurse staffing revenues were down 37% year over year, whereas Allied revenues declined 16% year over year. This figure compares to our Nurse and Allied Solutions segment’s third-quarter projection of $382.9 million.
The Physician and Leadership Solutions segment’s revenues totaled $180.6 million, up 13.2% year over year on the back of a 26% uptick in locum tenens revenues, which amounted to $142 million (with growth coming from the MSDR acquisition). Interim leadership revenues were down 7% year over year. Physician and leadership search businesses saw a revenue decline of 38% year over year. This figure compares to our Physician and Leadership Solutions segment’s third-quarter projection of $178.8 million.
The Technology and Workforce Solutions segment’s revenues totaled $107.5 million, down 10.7% year over year. Language interpretation services business revenues came in at $75 million in the quarter (up 13% year over year), while the vendor management systems (VMS) business saw a 34% year-over-year revenue decline to reach $25 million. This figure compares to our Technology and Workforce Solutions segment’s third-quarter projection of $108.3 million.
AMN Healthcare Services Inc Price, Consensus and EPS Surprise
In the quarter under review, AMN Healthcare’s gross profit fell 26.4% year over year to $213.1 million. The gross margin contracted 293 basis points (bps) to 30.9%. We had projected 31% of gross margin for the third quarter.
Selling, general & administrative expenses fell 8.4% year over year to $149.7 million.
Adjusted operating profit totaled $63.4 million, reflecting a 49.7% decline from the prior-year quarter. The adjusted operating margin in the third quarter contracted 556 bps to 9.2%.
AMN Healthcare’s Financial Position
AMN Healthcare exited third-quarter 2024 with cash and cash equivalents of $30.6 million compared with $48 million at the second-quarter end. Total debt at the end of third-quarter 2024 was $1.135 billion compared with $1.195 billion at the second-quarter end.
Cumulative net cash provided by operating activities at the end of third-quarter 2024 was $247.6 million compared with $413.3 million a year ago.
AMN’s Guidance
AMN Healthcare has provided its financial outlook for the fourth quarter of 2024.
For the fourth quarter, the company expects revenues in the range of $685 million-$705 million, reflecting a decline of 14-16% compared with the prior-year figure. The Zacks Consensus Estimate is pegged at $668.2 million.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to decline 21-24% in the fourth quarter from the prior-year figure. The Technology and Workforce Solutions segment’s revenues are expected to decline 9% in the fourth quarter from the prior-year figure.
The company projects fourth-quarter revenues in the Physician and Leadership Solutions segment to increase 3% from the prior-year figure.
Our Take
AMN Healthcare’s dismal top-line and bottom-line performances in third-quarter 2024 were disappointing. The decline in the majority of its segmental revenues during the reported quarter was worrying. The contraction of both margins raises our apprehension about the stock. AMN Healthcare expects to register a decline in its overall top line and the majority of its segments in the fourth quarter of 2024, which is concerning.
However, AMN Healthcare exited the quarter with better-than-expected results. The uptick in the Physician and Leadership Solutions segment’s revenues, locum tenens revenues and Language interpretation services revenues was impressive.
Management confirmed that AMN Healthcare made progress on its market growth strategy with sequential improvements in the overall sales pipeline, Managed Services Program net wins and internal fill rates. The company’s tech-enabled, total talent solutions continued to be well received by clients looking to optimize their workforces, with AMN’s average number of services used by top clients increasing to approximately 10. Management also shared its plans of adding Locums functionality to extend the market leadership of its ShiftWise Flex VMS platform. These look promising for the stock.
AMN Healthcare’s Zacks Rank and Stocks to Consider
AMN currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated (DGX - Free Report) , ResMed Inc. (RMD - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Quest Diagnostics, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2024 adjusted EPS of $2.30, beating the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion outpaced the consensus mark by 3.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has a long-term estimated growth rate of 6.5%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.4%.
ResMed reported first-quarter fiscal 2025 adjusted EPS of $2.20, beating the Zacks Consensus Estimate by 8.4%. Revenues of $1.22 billion surpassed the Zacks Consensus Estimate by 2.9%. It currently carries a Zacks Rank #2.
ResMed has a long-term estimated growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.4%.
Boston Scientific reported third-quarter 2024 adjusted EPS of 63 cents, beating the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion surpassed the Zacks Consensus Estimate by 4.4%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 13.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.
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AMN Stock Falls Despite Q3 Earnings & Revenues Beat, Margins Contract
AMN Healthcare Services, Inc. (AMN - Free Report) delivered adjusted earnings per share (EPS) of 61 cents in the third quarter of 2024, which declined 69% year over year. However, the figure surpassed the Zacks Consensus Estimate by 5.2%.
GAAP EPS for the quarter was 18 cents, indicating an 87.1% plunge from the year-ago figure.
AMN’s Revenues in Detail
AMN Healthcare registered revenues of $687.5 million in the third quarter, down 19.4% year over year. However, the figure surpassed the Zacks Consensus Estimate by 2.6%.
Shares of this company lost nearly 6.5% in yesterday’s after-hours trading.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
AMN Healthcare’s 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 third quarter of 2024, the Nurse and Allied Solutions segment’s revenues totaled $399.4 million, down 30.4% year over year. Travel nurse staffing revenues were down 37% year over year, whereas Allied revenues declined 16% year over year. This figure compares to our Nurse and Allied Solutions segment’s third-quarter projection of $382.9 million.
The Physician and Leadership Solutions segment’s revenues totaled $180.6 million, up 13.2% year over year on the back of a 26% uptick in locum tenens revenues, which amounted to $142 million (with growth coming from the MSDR acquisition). Interim leadership revenues were down 7% year over year. Physician and leadership search businesses saw a revenue decline of 38% year over year. This figure compares to our Physician and Leadership Solutions segment’s third-quarter projection of $178.8 million.
The Technology and Workforce Solutions segment’s revenues totaled $107.5 million, down 10.7% year over year. Language interpretation services business revenues came in at $75 million in the quarter (up 13% year over year), while the vendor management systems (VMS) business saw a 34% year-over-year revenue decline to reach $25 million. This figure compares to our Technology and Workforce Solutions segment’s third-quarter projection of $108.3 million.
AMN Healthcare Services Inc Price, Consensus and EPS Surprise
AMN Healthcare Services Inc price-consensus-eps-surprise-chart | AMN Healthcare Services Inc Quote
AMN’s Margin Trend
In the quarter under review, AMN Healthcare’s gross profit fell 26.4% year over year to $213.1 million. The gross margin contracted 293 basis points (bps) to 30.9%. We had projected 31% of gross margin for the third quarter.
Selling, general & administrative expenses fell 8.4% year over year to $149.7 million.
Adjusted operating profit totaled $63.4 million, reflecting a 49.7% decline from the prior-year quarter. The adjusted operating margin in the third quarter contracted 556 bps to 9.2%.
AMN Healthcare’s Financial Position
AMN Healthcare exited third-quarter 2024 with cash and cash equivalents of $30.6 million compared with $48 million at the second-quarter end. Total debt at the end of third-quarter 2024 was $1.135 billion compared with $1.195 billion at the second-quarter end.
Cumulative net cash provided by operating activities at the end of third-quarter 2024 was $247.6 million compared with $413.3 million a year ago.
AMN’s Guidance
AMN Healthcare has provided its financial outlook for the fourth quarter of 2024.
For the fourth quarter, the company expects revenues in the range of $685 million-$705 million, reflecting a decline of 14-16% compared with the prior-year figure. The Zacks Consensus Estimate is pegged at $668.2 million.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to decline 21-24% in the fourth quarter from the prior-year figure. The Technology and Workforce Solutions segment’s revenues are expected to decline 9% in the fourth quarter from the prior-year figure.
The company projects fourth-quarter revenues in the Physician and Leadership Solutions segment to increase 3% from the prior-year figure.
Our Take
AMN Healthcare’s dismal top-line and bottom-line performances in third-quarter 2024 were disappointing. The decline in the majority of its segmental revenues during the reported quarter was worrying. The contraction of both margins raises our apprehension about the stock. AMN Healthcare expects to register a decline in its overall top line and the majority of its segments in the fourth quarter of 2024, which is concerning.
However, AMN Healthcare exited the quarter with better-than-expected results. The uptick in the Physician and Leadership Solutions segment’s revenues, locum tenens revenues and Language interpretation services revenues was impressive.
Management confirmed that AMN Healthcare made progress on its market growth strategy with sequential improvements in the overall sales pipeline, Managed Services Program net wins and internal fill rates. The company’s tech-enabled, total talent solutions continued to be well received by clients looking to optimize their workforces, with AMN’s average number of services used by top clients increasing to approximately 10. Management also shared its plans of adding Locums functionality to extend the market leadership of its ShiftWise Flex VMS platform. These look promising for the stock.
AMN Healthcare’s Zacks Rank and Stocks to Consider
AMN currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated (DGX - Free Report) , ResMed Inc. (RMD - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Quest Diagnostics, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2024 adjusted EPS of $2.30, beating the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion outpaced the consensus mark by 3.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has a long-term estimated growth rate of 6.5%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.4%.
ResMed reported first-quarter fiscal 2025 adjusted EPS of $2.20, beating the Zacks Consensus Estimate by 8.4%. Revenues of $1.22 billion surpassed the Zacks Consensus Estimate by 2.9%. It currently carries a Zacks Rank #2.
ResMed has a long-term estimated growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.4%.
Boston Scientific reported third-quarter 2024 adjusted EPS of 63 cents, beating the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion surpassed the Zacks Consensus Estimate by 4.4%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 13.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.