Yahoo Finance Amedisys (AMED) Q1 Earnings Surpass Estimates, Margins Rise
Amedisys, Inc. AMED reported adjusted earnings per share (EPS) of $1.03 in the first quarter of 2024, which topped 3% from the year-ago quarter’s $1.00 per share. The bottom line also beat the Zacks Consensus Estimate by 1.9%.
The quarter’s adjustments include certain merger-related expenses and other (income)/expenses, net. GAAP EPS in the first quarter was 59 cents compared to 23 cents in the same period last year.
Net service revenues totaled $571.4 million, up 2.7% year over year. The top line surpassed the Zacks Consensus Estimate by 1.2%.
Segments in Detail
Net service revenues from the Home Health division totaled $364 million in the quarter, up 6% year over year.
Within the segment, Medicare revenues of $215.8 million increased slightly by 0.2% year over year. Non-Medicare revenues improved by 15.9% year over year to $148.2 million.
Within the Hospice division, net service revenues were $201 million (up 3.9% year over year), including Medicare revenues of $190 million (up 4%) and non-Medicare revenues of $11 million (up 2.8%).
Amedisys, Inc. Price, Consensus and EPS Surprise
Amedisys, Inc. price-consensus-eps-surprise-chart | Amedisys, Inc. Quote
Amedisys, Inc. Price, Consensus and EPS Surprise
The High Acuity Care segment reported net service revenues of $6.4 million in the first quarter, which surged 36.2% from the year-ago quarter’s figure. The Corporate segment did not register any recognizable revenues in the first quarter.
Margins
The company's gross profit improved 3.5% to $249.9 million in the quarter under review. The gross margin expanded 35 basis points (bps) to 43.7%.
Expenses on salaries and benefits rose 1.3% to $127.9 million. Other expenses fell 9.8% to $58 million. The adjusted operating profit amounted to $64 million, up 25.9% from the year-ago quarter’s levels. The adjusted operating margin expanded 207 bps to 11.2% from the prior-year quarter’s level.
Liquidity and Cash Position
Amedisys exited the first quarter with cash and cash equivalents of $108.2 million compared with $126.5 million at the end of 2023. The company's long-term obligations (excluding the current portion) were $356.1 million at the end of the first quarter of 2024 compared with $361.9 million at the end of 2023.
Cumulative net cash used by operating activities at the end of the first quarter was $6.5 million compared with cash inflow of $26 million a year ago.
Our Take
Amedisys ended the first quarter of 2024 with better-than-expected earnings and revenues. The company’s impending merger with UnitedHealth Group’s Optum brings together two organizations dedicated to providing compassionate, value-based comprehensive care to patients and their families. Further, the expansion of both margins during the quarter is encouraging.
Meanwhile, the uptick in Amedisys' operating income has been dampened by planned wage increases, wage inflation, a shift in the home health payor mix and investments in hospice clinical staffing.
Zacks Rank and Other Key Picks
Amedisys currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Inspire Medical Systems INSP, Encompass Health EHC and HCA Healthcare HCA.
Inspire Medical Systems, sporting a Zacks Rank #1 (Strong Buy), reported a fourth-quarter 2023 EPS of 49 cents, which beat the Zacks Consensus Estimate of a loss of 4 cents. Revenues of $192.5 million topped the consensus estimate by 0.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Inspire Medical Systems has an estimated earnings growth rate of 51.4% in 2024 compared with the industry’s 20.3%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 353.6%.
Encompass Health, carrying a Zacks Rank #2, reported a 2024 first-quarter EPS of $1.12, surpassing the Zacks Consensus Estimate by 20.4%. Revenues of $1.32 billion outpaced the Zacks Consensus Estimate by 3.6%.
EHC has an estimated long-term earnings growth rate of 15% compared to the industry’s 11.7%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 18.7%.
HCA Healthcare, carrying a Zacks Rank #2, reported a first-quarter 2024 EPS of $5.36, which surpassed the Zacks Consensus Estimate by 6.9%. Revenues of $17.3 billion topped the Zacks Consensus Estimate by 2.9%.
HCA has an estimated long-term earnings growth rate of 10.1% compared with the industry’s 9.9% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 5.6%.
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