LHC Group Holdings’ (LHCG - Free Report) first-quarter 2020 adjusted earnings per share (EPS) of 75 cents beat the Zacks Consensus Estimate of 69 cents by 8.7%. However, the bottom line fell 23.5% year over year.
Revenues in Detail
The company reported net service revenues of $512.9 million in the quarter, which beat the Zacks Consensus Estimate by 1.2%. Also, the top line improved 2% on a year-over-year basis.
In the quarter under review, total organic growth in home health admissions was 7.1% year over year, while organic growth in hospice admissions advanced 0.2%.Home health service revenues came in at $367.8 million, up 1.3% year over year, whereas hospice services totaled $60.5 million, up 17%.
On Jan 1, 2020, LHC Group completed the acquisition of eight home health and hospice providers in three states, all of which were hospital joint ventures. These acquisitions account for almost $23.8 million in annualized revenues.
Gross profit in the quarter totaled $191.7 million, up 5.5%. Gross margin in the reported quarter was 37.4%, up 124 basis points (bps).
Operating profit came in at $33.8 million, down 7.1%. Operating margin was 6.6%, down 65 bps.
Due to the uncertainty regarding the impact and disruption caused by COVID-19, the company has withdrawn its 2020 guidance.
LHC Group exited the first quarter on a strong note. The company continues to gain from home health services and hospice admissions, which rose year over year in the reported quarter. Increase in the topline also instills optimism. LHC Group is also anticipated to gain from joint ventures. Expansion is gross margin is encouraging.
However, a highly competitive home healthcare market adds to the woes. The company also witnessed contraction in operating margin in the quarter under review.
Zacks Rank and Other Key Picks
LHC Group currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space are Aphria Inc. (APHA - Free Report) , Biogen Inc. (BIIB - Free Report) and Eli Lilly and Company (LLY - Free Report) .
Aphria reported third-quarter fiscal 2020 adjusted EPS of 2 cents against the Zacks Consensus Estimate of a loss of 4 cents. Net revenues of $64.4 million outpaced the consensus estimate by 14.6%. The company carries a Zacks Rank #2 at present.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biogen currently carries a Zacks Rank #2. It reported first-quarter 2020 adjusted EPS of $9.14, surpassing the Zacks Consensus Estimate by 18.1%. Revenues of $3.53 billion outpaced the consensus mark by 3.2%.
Eli Lilly delivered first-quarter 2020 EPS of $1.75, outpacing the Zacks Consensus Estimate by 12.9%. Revenues of $145.3 million surpassed the consensus estimate by 6.3%. The company currently sports a Zacks Rank #1.
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