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AMN Healthcare (AMN) Q2 Earnings Beat Estimates, Margins Up

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·5 min read
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AMN Healthcare Services Inc. AMN delivered adjusted earnings per share (“EPS”) of $1.64 in the second quarter of 2021 which surged 97.6% year over year. The figure surpassed the Zacks Consensus Estimate by 11.6%.

GAAP EPS for the quarter was $1.39, reflecting a huge 195.7% surge from the year-earlier figure.

Revenues in Detail

AMN Healthcare registered revenues of $857.4 million in the second quarter, up 40.9% year over year. The figure surpassed the Zacks Consensus Estimate by 3.4%.

Robust segmental performances significantly drove the second-quarter revenues.

Segment Details

AMN Healthcare conducts its business via three reportable segments — Nurse and Allied solutions, Physician and Leadership solutions, and Technology and Workforce Solutions.

In the second quarter of 2021, the Nurse and Allied Solutions segment’s revenues totaled $624.5 million, up 40.5% year over year. Travel nurse staffing revenues grew 37% year over year whereas Revenue cycle solutions revenues grew 9% from the year-ago numbers. Allied division revenues rose 44% year over year.

The Physician and Leadership Solutions segment’s revenues totaled $139.1 million, up 28.1% year over year. This upside was on 26% growth in Locum tenens revenues. Interim leadership revenues were up 30% year over year. Physician and leadership search businesses saw a revenue growth of 33% year over year.

The Technology and Workforce Solutions segment’s revenues totaled $93.9 million, up 69.8% year over year. Language services business revenues came in at $46 million in the quarter (up 61% year over year) while the vendor management systems business saw 76% year-over-year revenue growth to reach $31 million.

AMN Healthcare Services Inc Price, Consensus and EPS Surprise

AMN Healthcare Services Inc Price, Consensus and EPS Surprise
AMN Healthcare Services Inc Price, Consensus and EPS Surprise

AMN Healthcare Services Inc price-consensus-eps-surprise-chart | AMN Healthcare Services Inc Quote

Margin Trend

In the quarter under review, AMN Healthcare’s gross profit rose 42% to $280.5 million. Gross margin expanded 25 basis points (bps) to 32.7%.

Selling, general & administrative expenses rose 14.3% to $156.6 million.

Adjusted operating profit totaled $123.9 million, reflecting a 104.9% surge from the prior-year quarter. Adjusted operating margin in the second quarter expanded 451 bps to 14.5%.

Financial Position

AMN Healthcare exited the second quarter of 2021 with cash and cash equivalents of $139.5 million compared with $78.3 million at the end of the first quarter. Total debt at the end of the second quarter of 2021 was $850 million compared with $905 million at the end of the first quarter.

Cumulative net cash flow from operating activities at the end of the second quarter was $210.6 million compared with $128.3 million a year ago.

Guidance

AMN Healthcare has provided its financial outlook for the third quarter of 2021.

For the third quarter, the company expects revenues in the range of $770-$790 million, reflecting growth of 40-43% compared with prior-year figures. The Zacks Consensus Estimate for the same stands at $691.3 million.

With respect to the Nurse and Allied Solutions segment, the company expects revenues to grow around 45% from the prior-year figure. The Technology and Workforce Solutions segment’s revenues are expected to grow almost 44-48% from the prior-year figure.

The company projects third-quarter revenues at the Physician and Leadership Solutions segment to improve almost 25-27% from the prior-year figure.

Our Take

AMN Healthcare exited the second quarter with better-than-expected results. The company recorded robust performance across each of its core segments, along with surge in its top and bottom lines in the quarter. Per management, increased healthcare utilization and a tight labor market have created record high demand in many areas of the company’s business, which is encouraging. AMN Healthcare’s collaborations and innovations are expected to provide greater access to patient care, thereby raising our optimism. Expansion of both margins also bodes well for the stock. An upbeat revenue guidance for the third quarter of 2021 is encouraging.

However, the company’s reliance on third parties and operation in a stiff competitive space are discouraging.

Zacks Rank and Other Key Picks

AMN Healthcare currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the broader medical space that have announced their quarterly results are Encompass Health Corporation EHC, West Pharmaceutical Services, Inc. WST and Bio-Rad Laboratories, Inc. BIO.

Encompass Health, carrying a Zacks Rank #2, reported second-quarter 2021 adjusted EPS of $1.17, which beat the Zacks Consensus Estimate by 15.8%. Second-quarter revenues of $1.3 billion outpaced the consensus mark by 1.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

West Pharmaceutical reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Second-quarter revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2.

Bio-Rad reported second-quarter 2021 adjusted EPS of $3.54, surpassing the Zacks Consensus Estimate by 86.3%. Revenues of $715.9 million surpassed the Zacks Consensus Estimate by 17.3%. It currently sports a Zacks Rank #1.


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