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Mednax (MD) Down 20% Despite Q1 Earnings Beat on Patient Volumes

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Mednax, Inc.’s MD shares have declined 19.5% despite strong first-quarter 2022 earnings, reported on Apr 28. Investor sentiments might have been hurt by escalating expenses of the healthcare provider, which primarily stemmed from a 28.3% escalation in practice supplies and operating expenses, a 7.6% rise in practice salaries and benefits coupled with a 9.2% uptick in depreciation and amortization expenses.

Nevertheless, the downside was more than offset by consistent growth in patient volumes and improved net acquisition activity.

Mednax, Inc. Price, Consensus and EPS Surprise

MEDNAX, Inc. Price, Consensus and EPS Surprise
MEDNAX, Inc. Price, Consensus and EPS Surprise

Mednax, Inc. price-consensus-eps-surprise-chart | Mednax, Inc. Quote

Q1 Update

Mednax reported first-quarter 2022 adjusted earnings of 33 cents per share, which beat the Zacks Consensus Estimate by 22.2%. The bottom line rose 37.5% year over year.

Net revenues of Mednax amounted to $482 million, which improved nearly 8% year over year for the first quarter. The top line also outpaced the consensus mark by 1.8%.

Riding on net acquisition activity, overall same-unit revenues inched up 1.3% year over year. Same-unit revenues attributable to patient volume grew 3.2% year over year on account of sound growth in MD’s service lines.

Total operating expenses of $443.1 million increased 5.3% year over year for the quarter under review.

Meanwhile, general and administrative expenses declined nearly 8% year over year to $61.3 million.

Mednax’s interest expense of $11.8 million plunged 33% year over year on the back of continued redemption of its senior notes.

Adjusted EBITDA of $51 million climbed 12.1% year over year for the first quarter.

Financial Update (as of Mar 31, 2022)

Cash and cash equivalents of Mednax amounted to $7.2 million, which declined nearly 54-fold from the 2021-end figure.

Total assets decreased 14% from the figure at 2021-end to $2.3 billion.

Total debt was $807.3 million, down 19.6% from the 2021-end level.

Total equity of $877.1 million slid 2.2% from the figure at 2021-end.

Cash used in operations totaled $89.9 million for the first quarter, which declined 9.1% from the prior-year period’s cash usage of $98.9 million.

At quarter-end, Mednax had $149 million in borrowings as part of its revolving credit facility.

Q2 EBITDA View

For the second quarter, MD projects adjusted EBITDA to match or remain modestly higher than the prior-year figure of $66 million. The growth of the metric is expected to ramp up in second-half 2022.

2022 View

MD continues to anticipate revenues of $2 billion this year, which indicates a 4.7% increase from the 2021 reported figure.

It continues to expect adjusted EBITDA at a minimum of $270 million, suggesting 1.7% growth from the 2021 figure.

Meanwhile, quarterly interest expense is forecast to be around $8 million.

Zacks Rank

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

Other Medical Sector Releases

Of the Medical sector players that have reported first-quarter results so far, earnings of UnitedHealth Group Incorporated UNH, Anthem, Inc. ANTM and Tenet Healthcare Corporation THC beat the Zacks Consensus Estimate.

UnitedHealth Group reported first-quarter 2022 earnings of $5.49 per share, which outpaced the Zacks Consensus Estimate by 1.7%. UNH’s bottom line improved 3.4% year over year, courtesy of improving revenues. Revenues of UnitedHealth Group were $80.1 billion, which climbed 14.2% year over year and beat the Zacks Consensus Estimate by 1.9%. UNH’s medical care ratio of 82% expanded 110 basis points year over year.

Anthem reported first-quarter 2022 earnings of $8.25 per share, which outpaced the Zacks Consensus Estimate of $7.81 by 5.6%. ANTM’s bottom line also improved 17.7% year over year. Operating revenues of Anthem for the first quarter totaled $37.9 billion, which rose 18% year over year and surpassed the consensus mark by 1.4%. As of Mar 31, 2022, medical enrollment of Anthem amounted to roughly 46.8 million, which grew 7.5% year over year.

Tenet Healthcare reported first-quarter 2022 adjusted net earnings of $1.93 per share, which surpassed the Zacks Consensus Estimate of $1.04 by 85.6%. THC’s bottom line rose 48.5% year over year. Net operating revenues of $4.7 billion beat the Zacks Consensus Estimate by 1.5%. Yet, the figure dipped 0.8% year over year. THC’s adjusted net income from continuing operations increased 52.1% year over year to $213 million.


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