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VITUS to Hurt Chemed (CHE) Q1 Earnings, Roto-Rooter to Aid

Chemed Corporation CHE is scheduled to report first-quarter 2021 results on Apr 27, after the closing bell.

In the last reported quarter, the company’s earnings of $5.13 lagged the Zacks Consensus Estimate by 19%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and missed on one, the average beat being 10.05%.

Let’s see how things have shaped up prior to this announcement.

Factors to Note

Just like the last reported quarter, through the first quarter, operations in both the business segments might have remained extremely challenging for Chemed.


Since the beginning of the pandemic Chemed’s VITAS Healthcare segment has been directly directly impacted. The most complex issue faced by VITAS over the past several months has been the disruptive impact the pandemic has had on traditional hospice referral sources, which in turn has impacted Chemed’s patient census patterns. However, the federal government’s recent supportive approach in terms of relaxing regulations, allowing the use of telehealth in a broader way and providing pragmatic flexibility and care for entire patient census has started to benefit the company’s business. This should have helped in some sort of recovery in the company’s VITAS business in Q1.

Chemed Corporation Price and EPS Surprise

Chemed Corporation Price and EPS Surprise
Chemed Corporation Price and EPS Surprise

Chemed Corporation price-eps-surprise | Chemed Corporation Quote

However, on the fourth-quarter earnings call, the company noted that VITAS will register continued weak occupancy and corresponding weak referrals from senior housing in the first half of 2021. This guidance anticipates senior housing to begin to normalize to pre-pandemic occupancy starting in the second half of calendar year 2021. This is likely to have impacted first-quarter revenues within this segment.


Roto-Rooter Q1 operating results are expected to reflect strong growth on continued strong residential plumbing and drain cleaning performance. In the last-reported quarter, demand in these areas was more than adequate, which compensated for weakness from commercial customers. Fourth-quarter branch residential demand set all-time records. With the pandemic situation worsening and hygiene requirements remaining unchanged through the months of the first quarter, we expect this part of the company’s business to once again register strong top-line growth.

The Estimate Picture

For first-quarter 2021, the Zacks Consensus Estimate for total revenues of $516.9 million implies an improvement of 0.2% from the prior-year reported figure.

The consensus estimate for earnings per share is pegged at $4.20, implying an improvement of 14.1% from the prior-year reported figure.

What Our Model Suggests

Our proven model does not conclusively predict an earnings beat for Chemed this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Chemed has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

Stocks Worth a Look

Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.

Elanco Animal Health Incorporated ELAN currently has a Zacks Rank #2 and an Earnings ESP of +1.90%. You can see the complete list of today’s Zacks #1 Rank stocks here.

HCA Healthcare, Inc. HCA has an Earnings ESP of +8.91% and a Zacks Rank of 2, at present.

Avenue Therapeutics, Inc. ATXI has an Earnings ESP of +16.67% and a Zacks Rank of 2, at present.

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HCA Healthcare, Inc. (HCA) : Free Stock Analysis Report

Chemed Corporation (CHE) : Free Stock Analysis Report

Avenue Therapeutics, Inc. (ATXI) : Free Stock Analysis Report

Elanco Animal Health Incorporated (ELAN) : Free Stock Analysis Report

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