Amedisys' (AMED) Q4 Earnings Miss Estimates, Margins Up
Amedisys, Inc. AMED reported adjusted earnings per share (EPS) of 94 cents in the fourth quarter of 2023, plunging 18.9% from the year-ago quarter’s figure of $1.16 per share. The bottom line missed the Zacks Consensus Estimate by 9.6%.
The quarter’s adjustments include certain merger related expenses, clinical optimization and CEO transition costs.
GAAP EPS in the fourth quarter was 59 cents, in line with the year-ago figure of 97 cents.
For the full year, adjusted earnings were $4.30 per share, reflecting a 14.2% fall from the year-ago period. It lagged the Zacks Consensus Estimate by 4.2%.
Net service revenues totaled $570.8 million, up 1.6% year over year. The top line surpassed the Zacks Consensus Estimate by 1.1%.
Total revenues for 2023 were $2.24 billion, reflecting a 0.6% rise from the year-ago period. The figure lagged the Zacks Consensus Estimate by 3%.
Segments in Detail
Net service revenues from the Home Health Division totaled $358.9 million in the quarter, up 4.3% year over year. Within the segment, Medicare revenues of $221.1 million dropped 1.6% year over year. Non-Medicare revenues increased 14.7% to $137.8 million.
Within the Hospice Division, net service revenues were $206 million (up 4.2% year over year), including Medicare revenues of $186.3 million (up 4.2%) and non-Medicare revenues of $11.3 million (up 4.4%).
Amedisys, Inc. Price, Consensus and EPS Surprise
Amedisys, Inc. price-consensus-eps-surprise-chart | Amedisys, Inc. Quote
The High Acuity Care segment reported net service revenues of $5.9 million in the fourth quarter, surging 63.9% from the year-ago quarter’s figure of $3.6 million. The Corporate segment did not register any recognizable revenues in the fourth quarter.
Margins
The company's gross profit improved 1.8% to $249.4 million in the quarter under review. Gross margin expanded 12 basis points (bps) to 43.7%.
Expenses on salaries and benefits rose 6.5% to $140.6 million. Other expenses fell 14.6% to $51.9 million. The adjusted operating profit amounted to $56.8 million, up 9.1% from the year-ago quarter’s levels. The adjusted operating margin expanded 69 bps to 9.9% from the prior-year quarter’s level.
Liquidity and Cash Position
Amedisys exited 2023 with cash and cash equivalents of $126.5 million compared with $40.5 million at the end of 2022. The company's long-term obligations (excluding the current portion) were $361.9 million at the end of 2023, compared with $419.4 million at the end of 2022.
Cumulative net cash used by operating activities at the end of the fourth quarter was $137.2 million compared with $133.3 million a year ago.
Our Take
Amedisys ended fourth-quarter 2023 with lower-than-expected earnings and revenues beating estimates. Amedisys earlier announced that it would be acquired by UnitedHealth Group Incorporated unit Optum. Combining Optum’s extensive value-based care expertise with Amedisys’ dedication to quality and care innovation in the home and its employees’ patient-first culture can improve the health outcomes and experiences of more patients at lower costs, resulting in continued growth. The company is dealing with the continuous shortage of clinical labor, nursing in particular, which has been challenging.
Zacks Rank and Key Picks
Amedisys currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Stryker Corporation SYK, Cencora, Inc. COR and Cardinal Health CAH.
Stryker, carrying a Zacks Rank #2 (Buy), reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Cencora, carrying a Zacks Rank #2, reported a first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.
COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.
Cardinal Health reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion improved 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.
CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amedisys, Inc. (AMED) : Free Stock Analysis Report
Stryker Corporation (SYK) : Free Stock Analysis Report
Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
Cencora, Inc. (COR) : Free Stock Analysis Report
