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MEDNAX's (MD) Q3 Earnings Meet Estimates, Revenues Miss

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MEDNAX, Inc. MD reported third-quarter 2020 adjusted earnings of 33 cents per share, which matched the Zacks Consensus Estimate. However, the bottom line plunged 60.7% year over year due to soft revenues.

The COVID-19 pandemic continued to adversely affect the company’s patient volumes and revenues, which in turn, has acted as a drag on its third-quarter results.

Quarterly Details

The company generated revenues of $461 million, which missed the Zacks Consensus Estimate by 13.9%. The top line plunged also slumped 48.1% from the year-ago period. This was due to dented patient volumes stemming from the pandemic.

Same unit revenues inched down 0.4% year over year. Nevertheless, the decline was partially offset by growth stemming from the company’s recent buyouts.

General and administrative expenses increased 4.7% year over year to $66.3 million due to rise in general and administrative expenses.

Total operating expenses increased 8.3% year over year to $440.2 million due to higher practice salaries and benefits, general and administrative expenses, depreciation and amortization, transformational and restructuring related expenses.

Interest expense of the company declined 8.7% to $27.3 million due to lower borrowings.

In the quarter under review, adjusted EBITDA totaled $72.7 million, up 4.9% year over year.

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

Financial Update

As of Sep 30, 2020, the company had cash and cash equivalents of $294.5 million, which increased nearly three-fold from the level as of Dec 31, 2019.

The company’s total debt, net of $1.7 billion inched up 0.8% from the level at 2019 end, while total assets worth $3.4 billion were down 17.4% from last-year end.

Cash flow generated from operating activities was $127.1 million in the quarter under review, which increased more than two-fold year over year.

Business Update

The company has inked a deal this September to divest MEDNAX Radiology Solutions and intensify focus on Pediatrix and Obstetrix medical groups. It aims to channelize its resources as a pediatrics and obstetrics organization.

Zacks Rank

MEDNAX currently carries a Zacks Rank #4 (Sell).

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 third-quarter results so far, UnitedHealth Group Incorporated UNH, Tenet Healthcare Corporation THC and Universal Health Services, Inc. UHS beat the Zacks Consensus Estimate for earnings.

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UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
 
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