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Amedisys (AMED) Beats Q3 Earnings Estimates, Ups 2020 View

Zacks Equity Research
·4 min read

Amedisys, Inc. AMED reported adjusted earnings per share (EPS) of $2.24 for third-quarter 2020, up 94.8% from the year-ago figure. The bottom line beat the Zacks Consensus Estimate by 76.4%.

Net service revenues grossed $485.1 million, up 9.9% year over year. The top line surpassed the Zacks Consensus Estimate by 2.1%.

Quarter in Detail

Within the Home Health division, net service revenues totaled $326 million in the quarter, reflecting 4.7% rise year over year. Within this, Medicare revenues of $222.2 million improved 5.1% year over year. Non-Medicare revenues increased 3.8% to $103.8 million.

Within the Hospice division, net service revenues were $199.7 million (up 22.9% year over year), including Medicare revenues of $189 million (up 23.5%) and non-Medicare revenues of $10.7 million (up 20.2%).

Amedisys, Inc. Price, Consensus and EPS Surprise

Amedisys, Inc. Price, Consensus and EPS Surprise
Amedisys, Inc. Price, Consensus and EPS Surprise

Amedisys, Inc. price-consensus-eps-surprise-chart | Amedisys, Inc. Quote

The company’s additional operating segments, post integration, are Personal Care and Corporate. At Personal Care, net service revenues totaled $18.4 million, representing a decline of 11.1% from the year-ago number. The Corporate segment did not register any revenues in the third quarter.

Margins

Gross profit for the company improved 19.7% to $246.4 million in the quarter under review. Gross margin expanded 366 basis points (bps) to 45.3%.

Expense on salaries and benefits rose 23.2% to $123.1 million. However, Other expenses increased 1.8% to $49.3 million. Operating profit of $73.9 million reflected a 28.5% improvement from the year-ago figure. Operating margin also expanded 196 bps to 13.6% from the prior-year level.

Cash Position

Amedisys exited the quarter with cash and cash equivalents of $112.9 million compared with $177.3 million at the end of the second quarter of 2020. The company's long-term obligations (excluding current portion) were $300.6 million at the end of the third quarter compared with $392.7 million at the end of second-quarter 2020.

Cumulative net cash provided by operating activities at the end of the third quarter was $223 million compared with $126.8 million a year ago.

2020 Guidance

The company, taking its third-quarter performance into consideration, updated its full-year guidance.

Amedisys currently projects net service revenues within $2.067 billion to $2.072 billion (compared with the earlier-provided range of $2.04-$2.07 billion). The Zacks Consensus Estimate for the same is pegged at $2.30 billion.

Adjusted EPS is anticipated within $6.02-$6.08 (compared with $4.84-$5.06 guided earlier). The Zacks Consensus Estimate for the same is pegged at $4.58.

Our Take

Amid the coronavirus-led volume disruption across the United States, Amedisys ended the third quarter with better-than-expected earnings and revenues. An impressive performance by the company’s Home health and hospiceamid the pandemic-led business disruptions buoys optimism. Both the segments showed strong recoveries and returned to growth this quarter. The increased full-year guidance by the company instills investors’ confidence.

Zacks Rank and Other Key Picks

Amedisys currently carries a Zacks Rank #2 (Buy).

Some other better-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. WST, Thermo Fisher Scientific Inc. TMO and Align Technology, Inc. ALGN.

West Pharmaceutical reported third-quarter 2020 adjusted EPS of $1.15, beating the Zacks Consensus Estimate by 13.9%. Net revenues of $548 million outpaced the consensus estimate by 7.2%. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher, a Zacks Rank #2 company, reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion outpaced the consensus mark by 10%.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, surpassing the Zacks Consensus Estimate by a stupendous 281.4%. Net revenues of $734.1 million exceeded the Zacks Consensus Estimate by 38%. It currently sports a Zacks Rank #1.

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Amedisys, Inc. (AMED) : Free Stock Analysis Report
 
Align Technology, Inc. (ALGN) : Free Stock Analysis Report
 
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