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Amedisys (AMED) Earnings Top Q4 Estimates, Revenues Lag
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Amedisys Inc. (AMED - Free Report) reported adjusted earnings from continuing operations of 44 cents per share in the fourth quarter of 2016, up 10% year over year. Earnings also surpassed the Zacks Consensus Estimate by the same magnitude.
Excluding adjustments, the company's reported earnings of 26 cents a share were down 31.6% from the year-ago quarter.
Full-year adjusted EPS (earnings per share) came in at $1.55, up 4.7% from the year-ago period.
Amedisys primarily derives revenues from its home health and hospice agencies. Fourth-quarter net service revenues grossed $366.3 million, up 8.2% year over year. The top line however, remained below the Zacks Consensus Estimate of $370 million.
Full-year 2016 revenues were $1,437.4 million, up 12.3% from 2015.
Within the company's Home Health division, net service revenues totaled $268.3 million (up 2.2%) in the fourth quarter. Medicare revenues of $203.2 million improved 7.1% year over year while non-Medicare revenues declined 2.7% to $65.1 million.
Within the Hospice division, net service revenues grossed $85.2 million (up 12.4% year over year), including Medicare revenues of $80.7 million (up 13.8%) and non-Medicare revenues of $4.5 million (down 8.2%).
The company’s gross margin contracted 115 basis points (bps) to 41.9% in the fourth quarter while gross profit rose 5.3%. Expense on salaries and benefits increased 10% to $77.0 million. Other expenses, however, dropped 2.9% to $45.1 million. Adjusted operating income of $77.8 million in the reported quarter reflects an increase of 2% from the year-ago adjusted operating income of $76.3 million. Operating margin contracted 130 bps to 21.2% from the year-ago figure.
Amedisys exited the year with cash and cash equivalents of $30.2 million compared with $27.5 million at the end of the preceding year. The company's long-term obligations (excluding current portion) were $87.8 million at the end of 2016, down from $91.6 million at the end of 2015. Full-year net operating cash flow was $62.3 million compared with $107.8 million in the year-ago period.
Our Take
Amedisys ended the fourth quarter with earnings ahead of the Zacks Consensus Estimate but revenues missing the mark. In the Home Health division, the company witnessed strong organic growth in Medicare and non-Medicare revenues. Amedisys is currently focused on three priorities – clinical distinction, driving organic and inorganic growth, realizing operational efficiencies and becoming an employer of choice.
However, the recent proposed rule for Home Health in 2017 by CMS, which includes a shift to a budget neutral plan for reimbursement, may affect growth for the company. Escalation in operating expenses and contraction in margins continue to be concerns.
Zacks Rank & Key Picks
Amedisys currently has a Zacks Rank #3 (Hold). Better-ranked medical stocks include Glaukos Corp. (GKOS - Free Report) , Cardiovascular Systems and Neogen Corp. (NEOG - Free Report) . Glaukos sports a Zacks Rank #1 (Strong Buy), while Cardiovascular Systems and Neogen carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Glaukos gained over 100% in the last one year compared with the S&P 500’s gain of 22.6%. The company has a stellar four-quarter average earnings surprise of over 100%.
Cardiovascular Systems surged over 100% in the last year compared with the S&P 500. It has a four-quarter average earnings surprise of 67.8%.
Neogen gained 34.4% in the past one year, better than the S&P 500 mark. The stock has an impressive long-term earnings growth rate of 16.7% for the next five years compared with the industry average of 15.2%.
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Amedisys (AMED) Earnings Top Q4 Estimates, Revenues Lag
Amedisys Inc. (AMED - Free Report) reported adjusted earnings from continuing operations of 44 cents per share in the fourth quarter of 2016, up 10% year over year. Earnings also surpassed the Zacks Consensus Estimate by the same magnitude.
Excluding adjustments, the company's reported earnings of 26 cents a share were down 31.6% from the year-ago quarter.
Full-year adjusted EPS (earnings per share) came in at $1.55, up 4.7% from the year-ago period.
Amedisys primarily derives revenues from its home health and hospice agencies. Fourth-quarter net service revenues grossed $366.3 million, up 8.2% year over year. The top line however, remained below the Zacks Consensus Estimate of $370 million.
Full-year 2016 revenues were $1,437.4 million, up 12.3% from 2015.
Amedisys Inc Price, Consensus and EPS Surprise
Amedisys Inc Price, Consensus and EPS Surprise | Amedisys Inc Quote
Quarter in Detail
Within the company's Home Health division, net service revenues totaled $268.3 million (up 2.2%) in the fourth quarter. Medicare revenues of $203.2 million improved 7.1% year over year while non-Medicare revenues declined 2.7% to $65.1 million.
Within the Hospice division, net service revenues grossed $85.2 million (up 12.4% year over year), including Medicare revenues of $80.7 million (up 13.8%) and non-Medicare revenues of $4.5 million (down 8.2%).
The company’s gross margin contracted 115 basis points (bps) to 41.9% in the fourth quarter while gross profit rose 5.3%. Expense on salaries and benefits increased 10% to $77.0 million. Other expenses, however, dropped 2.9% to $45.1 million. Adjusted operating income of $77.8 million in the reported quarter reflects an increase of 2% from the year-ago adjusted operating income of $76.3 million. Operating margin contracted 130 bps to 21.2% from the year-ago figure.
Amedisys exited the year with cash and cash equivalents of $30.2 million compared with $27.5 million at the end of the preceding year. The company's long-term obligations (excluding current portion) were $87.8 million at the end of 2016, down from $91.6 million at the end of 2015. Full-year net operating cash flow was $62.3 million compared with $107.8 million in the year-ago period.
Our Take
Amedisys ended the fourth quarter with earnings ahead of the Zacks Consensus Estimate but revenues missing the mark. In the Home Health division, the company witnessed strong organic growth in Medicare and non-Medicare revenues. Amedisys is currently focused on three priorities – clinical distinction, driving organic and inorganic growth, realizing operational efficiencies and becoming an employer of choice.
However, the recent proposed rule for Home Health in 2017 by CMS, which includes a shift to a budget neutral plan for reimbursement, may affect growth for the company. Escalation in operating expenses and contraction in margins continue to be concerns.
Zacks Rank & Key Picks
Amedisys currently has a Zacks Rank #3 (Hold). Better-ranked medical stocks include Glaukos Corp. (GKOS - Free Report) , Cardiovascular Systems and Neogen Corp. (NEOG - Free Report) . Glaukos sports a Zacks Rank #1 (Strong Buy), while Cardiovascular Systems and Neogen carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Glaukos gained over 100% in the last one year compared with the S&P 500’s gain of 22.6%. The company has a stellar four-quarter average earnings surprise of over 100%.
Cardiovascular Systems surged over 100% in the last year compared with the S&P 500. It has a four-quarter average earnings surprise of 67.8%.
Neogen gained 34.4% in the past one year, better than the S&P 500 mark. The stock has an impressive long-term earnings growth rate of 16.7% for the next five years compared with the industry average of 15.2%.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with
jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO
Watch List today for free >>