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LHC Group (LHCG) Q2 Earnings Beat Estimates, Revenues Miss

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LHC Group Inc.’s (LHCG - Free Report) second-quarter 2019 adjusted earnings per share (EPS) of $1.07 beat the Zacks Consensus Estimate of $1.00 and improved 27.4% year over year.

The Zacks Rank #3 (Hold) company reported revenues worth $517.8 million in the quarter, which missed the Zacks Consensus Estimate by 0.8%. However, the top line improved 3.2% on a year-over-year basis.

Q2 Highlights

In the quarter under review, total growth in home health admissions was 1.4% year over year and organic growth was 9.1%.

Total growth in home health revenues was 4.2% year over year and organic growth was 6.6%. While growth in hospice admissions was 2.4% year over year, organic growth advanced 9.6%.

Notably, the company realized approximately $7.8 million in pre-tax synergies in the second quarter from its acquisition of Almost Family. Year to date, the company agreed to acquire 15 home health, hospice or home and community-based services locations, the majority of which are hospital joint ventures.

LHC Group Price, Consensus and EPS Surprise

 

LHC Group Price, Consensus and EPS Surprise

LHC Group price-consensus-eps-surprise-chart | LHC Group Quote

Margin

Gross profit in the quarter totaled $191.9 million, up 6.1%. Gross margin in the quarter was 37.1%, up 100 bps.

Operating income came in at $42.4 million, up 36.6% from the year-ago quarter’s $31 million. Operating margin was 8.2%, up 200 bps.

Guidance Affirmed

LHC Group affirmed guidance for 2019.

The company expects revenues in the band of $2.09-$2.14 billion. The Zacks Consensus Estimate stands at $2.11 billion, within the guided range.

Adjusted EPS is expected between $4.25 and $4.35. The Zacks Consensus Estimate is pegged at $4.30, within the projected range.

Adjusted EBITDA is projected to be in the range of $214 million to $220 million.

Wrapping Up

LHC Group exited the second quarter on a mixed note, wherein the earnings beat the consensus mark, while revenues missed the same. The company continues to gain from its home health services and hospice admissions, which rose year over year in the quarter. Substantial increase in the top and bottom lines also buoy optimism. Management is optimistic about the Almost Family acquisition, which has proven accretive in the quarter. LHC Group is also anticipated to gain from joint ventures. Strong 2019 outlook paints a bright picture as well. Expansion in margins is an added positive.

However, a highly competitive home healthcare market adds to woes.

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks which posted solid results this earning season are Stryker Corporation (SYK - Free Report) , Baxter International Inc. (BAX - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .

Stryker delivered third-quarter 2019 adjusted earnings per share of $1.98, beating the Zacks Consensus Estimate by 2.6%. Revenues of $3.65 billion surpassed the Zacks Consensus Estimate by 1.4%. The company carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Baxter delivered third-quarter 2019 adjusted earnings of 89 cents per share, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Revenues of $2.84 billion outpaced the Zacks Consensus Estimate of $2.79 billion by 1.9%. The company carries a Zacks Rank #2.

Intuitive Surgical reported third-quarter 2019 adjusted earnings per share of $3.25, which beat the Zacks Consensus Estimate of $2.85. Revenues were $1.1 billion, surpassing the Zacks Consensus Estimate of $1.03 billion. The company sports a Zacks Rank #1.

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