U.S. Markets close in 1 hr 25 mins

LHC Group (LHCG) Earnings Beat, Revenues Miss Estimates in Q1

Zacks Equity Research

LHC Group LHCG reported adjusted earnings per share (EPS) of 98 cents in the first quarter of 2019. The figure beat the Zacks Consensus Estimate of 90 cents and also surged 55.6% year over year.

The Zacks Rank #3 (Hold) company posted revenues worth $502.6 million in the quarter, which missed the Zacks Consensus Estimate by 1.7%. Revenues however shot up 72.7% on a year-over-year basis.

Q1 Highlights

In the quarter under review, total growth in home health admissions was 76.3% year over year and organic growth was 5.7%.

Total growth in home health revenues was 77.4% year over year and organic growth was 7%. Meanwhile, growth in hospice admissions was 13.1% year over year and organic growth was 6.2%.

Notably, the company realized approximately $7.4 million in pre-tax synergies in the first quarter from its acquisition of Almost Family. In the reported quarter, the company agreed to acquire 18 home health, hospice or home and community-based services locations, all of which are hospital joint ventures.

LHC Group Price, Consensus and EPS Surprise

 

LHC Group Price, Consensus and EPS Surprise

LHC Group price-consensus-eps-surprise-chart | LHC Group Quote

Margin

Gross profit in the quarter totaled $181.6 million, up 77.3%. Gross margin in the quarter was 36.1%, up 90 basis points (bps).

Operating income came in at $30.1 million, up significantly from the year-ago quarter’s $10.4 million. Operating margin was 6%, up 240 bps.

Guidance

LHC Group raised its guidance for 2019.

The company now expects revenues in the band of $2.09-$2.14 billion, compared with $2.08-$2.13 billion provided earlier. The Zacks Consensus Estimate stands at $2.11 billion, within the guided range.

Adjusted EPS is expected between $4.25 and $4.35 as against the prior guidance of $4.15 to $4.25. The Zacks Consensus Estimate is pegged at $4.20, below the projected range.

Wrapping Up

LHC Group exited the first quarter on a mixed note. The company continues to gain from its home health services and hospice admissions, which rose year over year in the quarter. Substantial increase in the top and bottom lines also buoy optimism. Management is optimistic about the Almost Family acquisition, which has proven accretive in the quarter. LHC Group is also expected to gain from joint ventures. A raised guidance for 2019 paints a bright picture as well.

Earnings of MedTech Majors at a Glance

Some better-ranked stocks which reported solid results this earning season are Stryker Corporation SYK, DENTSPLY SIRONA XRAY and CONMED Corporation CNMD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) 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.

DENTSPLY reported adjusted EPS of 49 cents in the first quarter of 2019, beating the Zacks Consensus Estimate of 38 cents. Revenues of $946.2 million surpassed the Zacks Consensus Estimate of $917.1 million.

CONMED posted first-quarter 2019 adjusted EPS of 57 cents, which beat the Zacks Consensus Estimate of 54 cents. Revenues were $218.4 million, surpassing the consensus estimate of $213 million.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.

See 7 breakthrough stocks 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
 
Stryker Corporation (SYK) : Free Stock Analysis Report
 
LHC Group (LHCG) : Free Stock Analysis Report
 
DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report
 
CONMED Corporation (CNMD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research