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Amedisys (AMED) Tops Earnings and Revenue Estimates in Q1

Zacks Equity Research

Amedisys, Inc. AMED reported adjusted earnings per share (EPS) of $1.11 in the first quarter of 2019, showing a 40.5% jump from the year-ago figure. The bottom line beat the Zacks Consensus Estimate of 89 cents by 24.7%.

Net service revenues grossed $467.3. million, up 17% year over year. Moreover, the top line beat the Zacks Consensus Estimate by 1.4%.

Quarter in Detail

Within the company's Home Health division, net service revenues totaled $310.1 million in the quarter, reflecting a 9.2% improvement year over year. Medicare revenues of $213.4 million rose 4.1% year over year while non-Medicare revenues improved 22.3% to $96.7 million.

Within the Hospice division, net service revenues grossed $137 million (up 40.8% year over year), including Medicare revenues of $130.7 million (up 42.4%) and non-Medicare revenues of $6.3 million (up 14.5%).

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 integrated two additional operating segments within its business, namely, Personal Care and Corporate. At Personal Care, net service revenues totaled $20.2 million, representing a 12.8% rise from the year-ago number. Meanwhile, the Corporate segment did not register any revenue in the first quarter.

Margins

Gross margin expanded 79 basis points (bps) to 41.1 % in the quarter under review. Expense on salaries and benefits rose 25.4% to $94.8 million. Other expenses rose 4.1% to $43.4 million. Adjusted operating profit of $53.8 million in the reported quarter reflects a 23.4% rise from the year-ago tally. Adjusted operating margin expanded 59 bps to 11.5% from a year ago.

Cash Position

Amedisys exited first-quarter 2019 with cash and cash equivalents of $10.6 million compared with $20.2 million at the end of 2018. The company's long-term obligations (excluding current portion) were $303.7 million at the end of the quarter compared with $5.7 million at the end of 2018. Net cash provided by operating activities was $20.1million at the end of the first quarter of 2019, compared with $40.3 million at the end of the year-ago quarter.

Our Take

Amedisys ended the first quarter of 2019 on a promising note. At the Home Health and Hospice divisions, the company witnessed solid year-over-year growth in Medicare and non-Medicare revenues. Amedisys is currently exploring opportunities in these segments. We are also impressed with the company’s solid performance in the recently-launched Personal Care segment.  A favorable demographic trend and strategic acquisitions also bode well.

However, an intense competitive landscape and regulatory concerns pose challenges to the home health and hospice industry.

Zacks Rank and Other Key Picks

Amedisys currently sports a Zacks Rank #1 (Strong Buy). A few other top-ranked companies which have reported solid results this earnings season are Stryker Corporation SYK, Abbott Laboratories ABT and CONMED Corporation CNMD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Stryker delivered first-quarter 2019 adjusted EPS of $1.88, beating the Zacks Consensus Estimate by 2.2%. Revenues of $3.52 billion were in line with the consensus estimate.

Abbott reported first-quarter 2019 adjusted EPS of 63 cents, topping the Zacks Consensus Estimate by 3.3%. Worldwide sales came in at $7.54 billion, above the consensus estimate of $7.47 billion.

CONMED posted first-quarter 2019 adjusted EPS of 57 cents, which exceeded the Zacks Consensus Estimate of 54 cents. Revenues summed $218.4 million, outshining the consensus mark of $213 million.

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