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Ensign Group (ENSG) Beats on Q4 Earnings, Raises '18 View

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The Ensign Group, Inc (ENSG - Free Report) reported record adjusted operating earnings of 40 cents per share in fourth-quarter 2017. The bottom line surpassed the Zacks Consensus Estimate of 36 cents. Earnings increased 33.3% year over year owing to higher revenues.

The Ensign Group, Inc. Price, Consensus and EPS Surprise


Net income was 21 cents per share, down 40% year over year.

Operational Update

Total revenues of $487.7 million increased nearly 12.6% year over year in the reported quarter and also beat the Zacks Consensus Estimate of $459 million.

Same store skilled nursing average daily revenue rates grew 4.9% year over year to $309.89 million. Same store managed care skilled nursing average daily revenue rates climbed 4.5% to $450.58 million, year over year.

Total Transitional and Skilled Services segment income was $39.9 million for the quarter under review, up 40.2% from the prior-year period.

Total Assisted and Independent Living Services segment revenues and income were up 13.7% to $35.8 million and 66.3% to $4.3 million, respectively, year over year.

Total Home Health and Hospice Services segment revenues and income were up 27.5% to $39.7 million and 27.7% to $5.8 million, respectively, year over year.

Total expenses rose 16.2% year over year to $461.6 million, primarily due to higher cost of services and general and administrative expense.

Full-Year Highlights

Adjusted operating earnings of $1.40 per share were in line with the Zacks Consensus Estimate.

Total revenues of $1.85 billion increased nearly 11.8% over the level in 2016 and also outpaced the Zacks Consensus Estimate of $1.80 billion.

Quarterly Segment Update

Transitional, Skilled & Assisted Living Services

The segment reported revenues of $403.5 million, up 11.5% year over year. Solid growth in skilled nursing and facilities drove this upside. Notably, the segment accounted for 82.7% of the total revenues in the fourth quarter.

Home Health & Hospice Services

For this segment, total operating revenues were $39.7 billion, up 27.4% year over year. This segment contributed 8.1% to the total revenues.

Other Services

This segment reported revenues of $8.7 million, up 1.3% from the prior-year quarter. This segment accounted for 1.8% of the total revenues.

Financial Update

Total cash and cash equivalents decreased 26.6% to $42.3 million as of Dec 31, 2017 from $57.7 million as of Dec 31, 2016.

As of Dec 31, 2017, long-term debt was $302.9 million, up from $275.5 million at the end of 2016.

Cash from operations in 2017 was $72.9 million, down 1.3% year over year.

Dividend Update

Ensign Group paid 4.50 cents per share, up 5.9% over the past year.

2018 Guidance

Management expects earnings in the range of $1.80-$1.87 per share, up from $1.58 to $1.66.

Revenues are anticipated to remain within the band of $2-$2.06 billion.

Zacks Rank & Performance of Other Insurers

Ensign Group carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other firms in the medical sector having reported fourth-quarter earnings so far, the bottom line of Anthem Inc. (ANTM - Free Report) , Humana Inc. (HUM - Free Report) and UnitedHealth Group Inc. (UNH - Free Report) beat the respective Zacks Consensus Estimate.

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