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Envision Healthcare (EVHC) Q4 Earnings Beat, Revenues Rise

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Envision Healthcare Corp. reported fourth-quarter earnings of 54 cents per share that beat the Zacks Consensus Estimate by 20%. Earnings significantly declined from $1.08 reported in the year-ago quarter, due to high operating expense.

Adjusted EBITDA for the fourth quarter came at $211.4 million, up 14.8% year over year.

The company reported net revenues of $2 billion, which beat the Zacks Consensus Estimate by 1% and improved 68% year over year.

The company incurred a net benefit of approximately $600 million from a reduction of deferred tax liabilities from the Tax Reform Act as well as a non-cash impairment charge of $500 million in goodwill reduction in its Physician Services segment.

Envision Healthcare Corporation Price, Consensus and EPS Surprise

Total operating expenses of $2.36 billion increased 82.7% year over year, due to higher salaries and benefits, insurance expenses and depreciation & amortization expenses.

Favorable Segment Performance

Physician Services

Net revenues from the segment were $1.67 billion, reflecting an increase of 8.3% year over year. The revenue growth was driven by 8.6% contribution from acquisitions and 0.4% from same contracts.

Adjusted EBITDA was $133.1 million, up 10.5% year over year.

Ambulatory Services

Net revenues were $333.1 million, up nearly 2% year over year, led by procedure volume growth.

For the reported quarter, adjusted EBITDA was $78.3 million, up 23.1% year over year thanks to a $7.7 million favorable legal settlement.

Financial Update

Envision Healthcare had cash and cash equivalents of $312.2 million, down 1.4% year over year.

Total long-term debt increased 8.2% year over year to $6.26 billion as of Dec 31, 2017.

The company’s ratio of total net debt to trailing 12-month EBITDA on Dec 31, 2017 as calculated under its credit agreement was 4.6 times.

Net cash provided by operating activities was $236.4 million as of Dec 31, 2017, up from $68.8 million as of Dec 31, 2016.

First-Quarter 2018 Guidance

The company expects adjusted EPS within the range of 61 cents and 67 cents and adjusted EBITDA in the band of $195-$205 million.

Full-Year 2018 Guidance

The company expects net revenues in the range of $8.35 to $8.53 billion, adjusted EBIDTA of $960 million to $1 billion and adjusted EPS between $3.46 and $3.70.  

Zacks Rank & Other Releases

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

Among the other firms in the medical sector that have reported fourth-quarter earnings so far, the bottom line at Centene Corp. (CNC - Free Report) , Aetna Inc and UnitedHealth Group Inc. (UNH - Free Report) beat their respective Zacks Consensus Estimate

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