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MEDNAX (MD) Q3 Earnings In Line With Estimates, Decline Y/Y

Zacks Equity Research

MEDNAX, Inc.’s MD third-quarter 2019 adjusted earnings of 91 cents per share came in line with the Zacks Consensus Estimate. Meanwhile, the bottom line declined 3.2% % year over year due to high expenses.

Quarterly Details

The company generated revenues of $889 million, surpassing the Zacks Consensus Estimate by 1.8%. However, the top line dipped 0.9% from the year-ago period.

Same-unit revenues inched up 4.2% year over year, mainly driven by higher patient volume.

General and administrative expenses rose 6.9% to $102.4 million due to higher legal, information technology and revenue cycle costs.

Interest expense of the company escalated 37.2% to $29.9 million for the third quarter, primarily due to higher effective interest rate on borrowings between two periods.

In the quarter under review, Adjusted EBITDA totaled $133 million, up 2.3% year over year.

Mednax, Inc Price, Consensus and EPS Surprise

Mednax, Inc Price, Consensus and EPS Surprise

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

Financial Update

As of Sep 30, 2019, the company had cash and cash equivalents of about $28.9 million, down 36.5% from the level at 2018 end.

The company incurred total debt of $1.9 billion, down 1.8% from the level at 2018 end and total assets of $4.2 billion, down 27.7% from the level at 2018 end.

Cash flows from operating activities were $155.9 million, up 15.3% year over year.

Fourth-Quarter Outlook

For the fourth quarter of 2019, the company expects adjusted EPS in the band of 87-95 cents.

This guidance assumes that total same-unit revenue growth for the three months ended Dec 31, 2019 will be in a 1-3% range from the prior-year period. It also assumes that the effective tax rate for the fourth quarter is 26.5%.

Shares outstanding are predicted to be around 83.4 million.

Adjusted EBITDA from continuing operations is expected between $125 million and $135 million.

2019 Guidance

Based on its third-quarter results, the company now expects Adjusted EBITDA for the full year to be around $500 million.

Zacks Rank

MEDNAX 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.

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