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Ensign Group's (ENSG) Q4 Earnings Top Estimates, Surge Y/Y

Zacks Equity Research

The Ensign Group, Inc ENSG delivered adjusted operating earnings of 52 cents per share, beating the Zacks Consensus Estimate by 10.6%. Moreover, the metric soared 53% year over year. The upside is mainly driven by segmental performances.

Net income for the quarter under review was $26 million, up 135.3% year over year.

Operational Update

Total revenues of $538 million increased 10.2% year over year in the reported quarter and also beat the Zacks Consensus Estimate by 2.3%. This upside was backed by solid segmental performances.

Total Transitional and Skilled Services segment income was $55.2 million for the quarter under consideration, up 38.2% from the prior-year period.

Total Assisted and Independent Living Services segment’s revenues were up 12.9% year over year to $40.5 million.

Segmental revenues at Total Home Health and Hospice Services were up 11.3% to $44.2 million.

Total expenses rose 9% year over year to $503 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 $441.7 million, up 9.4% year over year. Notably, the segment accounted for 82.1% of total revenues in the reported quarter.

Assisted and Independent Living Services

This segment generated operating revenues of $40.5 million, up 12.9% year over year with the segment contributing 7.5% to the company’s top line.

Home Health & Hospice Services

For this segment, total operating revenues were $44 billion, up 11.4% year over year. The same represented 8.2% to the total revenues.

Other Services

This segment delivered revenues of $11.4 million, surging 32% from the prior-year quarter. This segment reflected 2.2% of the total revenue base.

Financial Update

Total cash and cash equivalents declined 25% to $31 million from the year-end 2017 level.

As of Dec 31, 2018, long-term debt less current maturities was $233 million, down 23% from the level at 2017 end.

Cash from operations in the first nine months of 2018 was $210 million, up 188% year over year.

Dividend Update

Ensign Group paid a quarterly cash dividend of 4.8 cents per share during the fourth quarter. The company has been hiking its dividend for the last 16 years.

2019 Outlook

Management now expects earnings in the range of $2.17-$2.26 per share, lower than the Zacks Consensus Estimate of $2.35. It also anticipates annual revenues between $2.29 billion and $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 (Stock Buy) stocks here.

Upcoming Releases From Medical Sector

Some stocks worth considering from the medical sector are as follows:

Constellation Pharmaceuticals, Inc. CNST is set to report fourth-quarter 2018 earnings performance on Feb 14. The stock has an Earnings ESP of +9.72% and a Zacks Rank of 2.

Tenet Healthcare Corporation THC is slated to announce fourth-quarter earnings on Feb 25. The company has an Earnings ESP of +5.63% and a Zacks Rank of 3.

Alder BioPharmaceuticals, Inc. ALDR has an Earnings ESP of +13.52% and a Zacks Rank #2 (Buy). The company is scheduled to release fourth-quarter earnings on Feb 25.

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