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Ensign Group's (ENSG) Q2 Earnings Beat Estimates, Rise Y/Y

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The Ensign Group, Inc (ENSG - Free Report) delivered adjusted operating earnings of 51 cents per share in second-quarter 2019, beating the Zacks Consensus Estimate by 2%. Moreover, the metric improved 24.4% year over year on the back of higher revenues.

Also, adjusted net income in the quarter under review was $30.3 million, up 27.8% from the prior-year quarter

Operational Update

Total revenues of $575 million increased 14% year over year in the reported quarter. This upside was driven by solid segmental performances at Transitional and skilled services, Senior living services and Home health and hospice services. Moreover, the metric beat the Zacks Consensus Estimate by 0.5%.

Total Transitional and Skilled Services segment income was $56.7 million for the quarter under consideration, up 31.1% from the prior-year period.
Total Home Health and Hospice Services segment’s revenues rose 21.7% year over year to $50.2 million. Segment income for the same was up 16.6% year over year.

Total expenses escalated 15.8% year over year to $537 million due to higher cost of services plus general and administrative expenses.

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

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

The Ensign Group, Inc. price-consensus-eps-surprise-chart | The Ensign Group, Inc. Quote

Quarterly Segment Update

Transitional and Skilled Services


This segment generated revenues of $469 million, up 14.9% year over year. Notably, the segment accounted for 81.5% of the total revenues in the reported quarter.

Senior Living Services

This segment generated operating revenues of $42 million, up 14% year over year with the segment contributing 7.3% to the company’s top line.

Home Health & Hospice Services

Total operating revenues in this segment were $50 billion, up 22% year over year. The same represented 8.7% of the total revenues.

Other Services

This segment delivered revenues of $14 million, surging 50% from the prior-year quarter and reflecting 2.5% of the total revenue base.

Financial Update

The company exited the first half of 2019 with $39 million of cash and cash equivalents, up 44% year over year.

As of Jun 30, 2019, long-term debt less current maturities was $268 million, up 15% from the level at 2018 end.

For the first six months of 2019, net cash by operating activities stands at $72 million, down 29% year over year.

Business Update

In May, the company announced its plans to separate its home health and hospice agencies and substantially all of its senior living businesses into a separate publicly-traded company.

Dividend Update

Ensign Group paid out a quarterly cash dividend of 4.75 cents per share during the second quarter. The company has been hiking its dividend for the last 16 consecutive years.

2019 Outlook Reaffirmed

Following solid second-quarter earnings, management expects to maintain the metric’s earlier guidance of $2.22-$2.30. It also anticipates annual revenues between $2.34 billion and $2.40 billion.

Zacks Rank

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

Releases From the Medical Sector

Among other players from the medical sector having reported second-quarter earnings so far, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) , Anthem Inc. (ANTM - Free Report) and Centene Corporation (CNC - Free Report) outpaced the respective Zacks Consensus Estimate.

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