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Ensign Group (ENSG) Q1 Earnings Beat Estimates, Rise Y/Y

Zacks Equity Research

The Ensign Group, Inc ENSG delivered adjusted operating earnings of 55 cents per share in first-quarter 2019, beating the Zacks Consensus Estimate of 54 cents by 1.9%. Moreover, the metric improved 22.3% year over year on the back of higher revenues.

Adjusted net income in the quarter under review was $30.8 million, up 28% year over year.

Operational Update

Total revenues of $549 million increased 11.6% year over year in the reported quarter. This upside was driven by solid segmental performances. However, the metric missed the Zacks Consensus Estimate by 1.3%. Total Transitional and Skilled Services segment income was $58.8 million for the quarter under consideration, up 27.2% from the prior-year period.

Total Home Health and Hospice Services segment’s revenues were up 16% year over year to $46.1 million.

Segmental revenues for Senior Living Services rose 12.7% year over year to $40.7 million.

Total expenses escalated 11.4% year over year to $511.4 million due to higher cost of services plus general and administrative expenses.

The Ensign Group, Inc. Price, Consensus and EPS Surprise

The Ensign Group, Inc. Price, Consensus and EPS Surprise | The Ensign Group, Inc. Quote

Quarterly Segment Update

Transitional and Skilled Services

This segment generated revenues of $449.2 million, up 10.4% year over year. Notably, the segment accounted for 81.8% of total revenues in the reported quarter.

Senior Living Services

This segment generated operating revenues of $40.7 million, up 12.7% year over year with the segment contributing 7.4% to the company’s top line.

Home Health & Hospice Services

Total operating revenues in this segment were $46 billion, up 16% year over year. The same represented 8.4% of the total revenues.

Other Services

This segment delivered revenues of $13.1 million, surging 42.2% from the prior-year quarter and reflecting 2.4% of the total revenue base.

Financial Update

Total cash and cash equivalents increased 21.7% to $38 million from the level as of 2018 end.

As of Mar 31, 2019, long-term debt less current maturities was $240 million, up 3.2% from the level at 2018 end.

Cash from operations in the first three months of 2019 was $24 million, down 39% year over year.

Dividend Update

Ensign Group paid a quarterly cash dividend of 4.75 cents per share during the first quarter. The company has been hiking its dividend for the last 16 years.

2019 Outlook

Following solid first-quarter earnings, management now expects the metric in the range of $2.22-$2.30, up from the previous guidance of $2.17-$2.26. It also anticipates annual revenues between $2.34 billion and $2.40 billion, higher than the prior projection of $2.29-$2.35 billion.

Zacks Rank

Ensign Group carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other players from the medical sector, havingalready reported first-quarter earnings, the bottom-line figures of Anthem Inc. ANTM, Centene Corporation CNC and UnitedHealth Group Inc. UNH beat the respective Zacks Consensus Estimate.

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