The Ensign Group, Inc. ENSG delivered adjusted operating earnings of 55 cents per share in third-quarter 2019, missing the Zacks Consensus Estimate by 1.8% due to high expenses. However, the metric improved 19.6% year over year on higher revenues.
Also, adjusted net income in the quarter under review was $30.9 million, up 24% from the prior-year quarter.
Total revenues of $601 million increased 16.9% year over year in the reported quarter. This upside was driven by solid segmental performances at Transitional and skilled services, Senior living services plus Home health and hospice services. Moreover, the metric beat the Zacks Consensus Estimate by 0.2%.
Total Transitional and Skilled Services segment income was $56.8 million for the quarter under consideration, up 22.6% from the prior-year period.
Total Home Health and Hospice Services segment’s revenues rose 25.9% year over year to $55 million.
Total expenses escalated 15.8% year over year to $561 million due to higher cost of services, depreciation and amortization plus general and administrative expenses.
The Ensign Group, Inc. Price, Consensus and EPS Surprise
The Ensign Group, Inc. price-consensus-eps-surprise-chart | The Ensign Group, Inc. Quote
Quarterly Segment Update
Transitional and Skilled Services
Revenue generation of $485.9 million was up 15.2% year over year. Notably, the segment accounted for 80.9% of the total revenues in the reported quarter.
Senior Living Services
Operating revenues of $43.7 million were up 15.1% year over year with the segment contributing 7.3% to the company’s top line.
Home Health & Hospice Services
Total operating revenues in this segment were $55 million, up 25.9% year over year, representing 9.2% of the total revenues.
Revenues of $15.5 million surged 45.4% from the prior-year quarter, reflecting 2.6% of the total revenue base.
The company exited the first nine months of 2019 with $44 million of cash and cash equivalents, up 42.8% from the level at 2018 end.
As of Sep 30, 2019, long-term debt less current maturities was $265.7 million, up 14% from the level at 2018 end.
For the first nine months of 2019, net cash by operating activities stands at $137.5 million, down 12.5% year over year.
The company completed the spin-off of Pennant as previously announced.
Ensign Group paid out a quarterly cash dividend of 4.75 cents per share during the third quarter. The company has been hiking its dividend for the 16 consecutive years.
2019 and 2020 Outlook
Following solid third-quarter earnings, management again raised its 2019 guidance. The company now expects earnings between $2.24 and $2.31. It also anticipates annual revenues between $2.35 billion and $2.40 billion.
Including the fourth-quarter impact of the Pennant spin-off, management’s 2019 raised earnings per share guidance is expected between $2.15 and $2.21 per share on revenues of $2.27-$2.30 billion band.
For 2020, management of the company expects earnings to be in between $2.22 and $2.30 per share and annual revenue to be in the $2.30-$2.35 band.
Ensign Group carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Players
Among other players from the medical sector, having already reported third-quarter earnings, the bottom-line results of UnitedHealth Group Incorporated UNH, Anthem Inc. ANTM and Centene Corporation CNC topped the respective Zacks Consensus Estimate.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our just-released Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
Download Free Report Now >>
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
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
Anthem, Inc. (ANTM) : Free Stock Analysis Report
Centene Corporation (CNC) : Free Stock Analysis Report
The Ensign Group, Inc. (ENSG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research