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Amedisys (AMED) Beats on Q1 Earnings, Revenues Meet Mark
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Amedisys Inc. (AMED - Free Report) reported adjusted earnings from continuing operations of 47 cents per share in the first quarter of 2017, up 42.4% year over year. Earnings also surpassed the Zacks Consensus Estimate of 41 cents.
Excluding adjustments, the company reported earnings of 44 cents a share, reflecting a 131.6% surge from the year-ago quarter.
First-quarter net service revenues grossed $370.5 million, up 6.2% year over year. The top line met the Zacks Consensus Estimate of $370 million.
Quarter in Detail
Within the company's Home Health division, net service revenues totaled $271.3 million (down 0.5%) in the first quarter. Medicare revenues of $198.7 million declined 3.9% year over year, while non-Medicare revenues improved 10.2% year over year to $72.6 million.
Within the Hospice division, net service revenues grossed $85.6 million (up 17.3% year over year), including Medicare revenues of $80.7 million (up 17.5%) and non-Medicare revenues of $4.9 million (up 13.9%).
Recently, the company integrated two additional operating segments within its business – Personal Care and Corporate. At Personal Care, net service revenues totaled $13.6 million, a substantial 338.7% increase from year-ago comparable number of $3.1 million.
Corporate, on the other hand, did not register any revenue till the end of the first quarter.
The company’s gross margin contracted 38 basis points (bps) to 41.8% in the first quarter, while gross profit rose 5.2%. Expense on salaries and benefits declined 2.9% to $74.5 million. Other expenses also dropped 13.5% to $40.4 million. Adjusted operating income of $39.8 million in the reported quarter reflects an increase of 69% from the year-ago adjusted operating income of $39.8 million. Operating margin expanded 400 bps to 10.7% from the year-ago figure.
Amedisys exited the first quarter with cash and cash equivalents of $48.3 million, compared with $30.2 million at the end of the preceding year. The company's long-term obligations (excluding current portion) were $85.4 million in the reported quarter, down from $87.8 million in the year ago quarter. Net operating cash flow was $27.1 million, compared with $12.2 million in the year-ago period.
Update on Tenet Healthcare Buyout
Amedisys announced that it has closed the acquisition of Tenet Healthcare’s (THC) home health and hospice operations in Arizona, Illinois, Massachusetts and Texas. The buyout, valued at $20.5 million, was announced in early March.
Tenet Healthcare is a diversified healthcare services company that offers technology-based health management solutions to hospitals, health systems, integrated delivery networks, physician groups, self-insured organizations and health plans.
Amedisys claims that the recently closed buyout is a strategic fit as it will help the company provide high-quality post-acute services in key markets. The consolidation will allow Amedisys to improve the delivery of care and management of patients across the care continuum in these markets.
Our Take
Amedisys ended the first quarter with an earnings beat and in-line revenues. At the Home Health division, the company witnessed decline in Medicare revenues while there was improvement in non-Medicare revenues. At hospice, the company registered strong growth across all segments. Amedisys is currently exploring new opportunities in Home Health and Hospice segments. The company’s favorable demographic trend and strategic acquisitions undertaken also encourages us.
Meanwhile, though we expect synergies from the Tenet Healthcare acquisition to boost operations, escalating operating expenses and a declining gross margin continue to be concerns.
Hologic gained over 33.7% in the last one year, compared with the S&P 500’s gain of 16.4%. The company has a stellar four-quarter average earnings surprise of over 4.16%.
Progenics Pharmaceuticals surged over 52.8% in the last year, as compared to the S&P 500. It has a four-quarter average earnings surprise of 8.45%.
Baxter International gained 23.4% in the past one year, better than the S&P 500 mark. It has a four-quarter average earnings surprise of 17.14%.
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Amedisys (AMED) Beats on Q1 Earnings, Revenues Meet Mark
Amedisys Inc. (AMED - Free Report) reported adjusted earnings from continuing operations of 47 cents per share in the first quarter of 2017, up 42.4% year over year. Earnings also surpassed the Zacks Consensus Estimate of 41 cents.
Excluding adjustments, the company reported earnings of 44 cents a share, reflecting a 131.6% surge from the year-ago quarter.
First-quarter net service revenues grossed $370.5 million, up 6.2% year over year. The top line met the Zacks Consensus Estimate of $370 million.
Quarter in Detail
Within the company's Home Health division, net service revenues totaled $271.3 million (down 0.5%) in the first quarter. Medicare revenues of $198.7 million declined 3.9% year over year, while non-Medicare revenues improved 10.2% year over year to $72.6 million.
Amedisys Inc Price, Consensus and EPS Surprise
Amedisys Inc Price, Consensus and EPS Surprise | Amedisys Inc Quote
Within the Hospice division, net service revenues grossed $85.6 million (up 17.3% year over year), including Medicare revenues of $80.7 million (up 17.5%) and non-Medicare revenues of $4.9 million (up 13.9%).
Recently, the company integrated two additional operating segments within its business – Personal Care and Corporate. At Personal Care, net service revenues totaled $13.6 million, a substantial 338.7% increase from year-ago comparable number of $3.1 million.
Corporate, on the other hand, did not register any revenue till the end of the first quarter.
The company’s gross margin contracted 38 basis points (bps) to 41.8% in the first quarter, while gross profit rose 5.2%. Expense on salaries and benefits declined 2.9% to $74.5 million. Other expenses also dropped 13.5% to $40.4 million. Adjusted operating income of $39.8 million in the reported quarter reflects an increase of 69% from the year-ago adjusted operating income of $39.8 million. Operating margin expanded 400 bps to 10.7% from the year-ago figure.
Amedisys exited the first quarter with cash and cash equivalents of $48.3 million, compared with $30.2 million at the end of the preceding year. The company's long-term obligations (excluding current portion) were $85.4 million in the reported quarter, down from $87.8 million in the year ago quarter. Net operating cash flow was $27.1 million, compared with $12.2 million in the year-ago period.
Update on Tenet Healthcare Buyout
Amedisys announced that it has closed the acquisition of Tenet Healthcare’s (THC) home health and hospice operations in Arizona, Illinois, Massachusetts and Texas. The buyout, valued at $20.5 million, was announced in early March.
Tenet Healthcare is a diversified healthcare services company that offers technology-based health management solutions to hospitals, health systems, integrated delivery networks, physician groups, self-insured organizations and health plans.
Amedisys claims that the recently closed buyout is a strategic fit as it will help the company provide high-quality post-acute services in key markets. The consolidation will allow Amedisys to improve the delivery of care and management of patients across the care continuum in these markets.
Our Take
Amedisys ended the first quarter with an earnings beat and in-line revenues. At the Home Health division, the company witnessed decline in Medicare revenues while there was improvement in non-Medicare revenues. At hospice, the company registered strong growth across all segments. Amedisys is currently exploring new opportunities in Home Health and Hospice segments. The company’s favorable demographic trend and strategic acquisitions undertaken also encourages us.
Meanwhile, though we expect synergies from the Tenet Healthcare acquisition to boost operations, escalating operating expenses and a declining gross margin continue to be concerns.
Zacks Rank & Key Picks
Amedisys currently has a Zacks Rank #3 (Hold). Better-ranked medical stocks include Hologic, Inc. (HOLX - Free Report) , Progenics Pharmaceuticals, Inc. and Baxter International Inc. (BAX - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hologic gained over 33.7% in the last one year, compared with the S&P 500’s gain of 16.4%. The company has a stellar four-quarter average earnings surprise of over 4.16%.
Progenics Pharmaceuticals surged over 52.8% in the last year, as compared to the S&P 500. It has a four-quarter average earnings surprise of 8.45%.
Baxter International gained 23.4% in the past one year, better than the S&P 500 mark. It has a four-quarter average earnings surprise of 17.14%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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