Amedisys (AMED) Q4 Earnings Beat Estimates, Revenues Miss

Amedisys, Inc. AMED reported adjusted earnings per share (EPS) of 94 cents in fourth-quarter 2019, up 3.3% from the year-ago figure. The bottom line also beat the Zacks Consensus Estimate of 93 cents by 1.1%.

Net service revenues grossed $500.7 million, up 15.3% year over year. However, the top line missed the Zacks Consensus Estimate by 1.8%.

2019 at a Glance

In 2019, the company reported net service revenues worth $1.96 billion, which improved 17.9% from the previous year. The top line missed the Zacks Consensus Estimate by 0.5%.

Adjusted EPS for the year was $4.40, up 21.2% from that of 2018. The figure also beat the consensus mark by 0.2%.

Amedisys, Inc. Price, Consensus and EPS Surprise

 

Amedisys, Inc. Price, Consensus and EPS Surprise

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

Quarter in Detail

Within the company's Home Health division, net service revenues totaled $316.2 million in the quarter, reflecting a 4% improvement year over year. Moreover, Medicare revenues of $215.2 million inched up 1.7% year over year. Non-Medicare revenues improved 9.2% to $101 million.

Within the Hospice division, net service revenues were $164.6 million (up 51.3% year over year) including Medicare revenues of $156.6 million (up 51.3%) and non-Medicare revenues of $8 million (up 50.9%).

The company recently integrated two additional operating segments within its business, namely, Personal Care and Corporate. At Personal Care, net service revenues totaled $19.9 million, representing a decline of 7.9% from the year-ago number. Meanwhile, the Corporate segment did not register any revenues in the fourth quarter.

Margins

Gross margin expanded 133 basis points (bps) to 40.9% in the quarter under review. Further, expense on salaries and benefits advanced 20.2% to $101.3 million. Other expenses increased 12.6% to $48.2 million as well. Meanwhile, operating profit of $41.6 million reflects a 14.1% rise from the year-ago figure. Operating margin also contracted 10 bps to 8.3% from the prior-year level.

Cash Position

Amedisys exited the December quarter with cash and cash equivalents of $30.3 million compared with $20.2 million in the prior-year quarter. The company's long-term obligations (excluding current portion) were $232.3 million at the end of the fourth quarter compared with $5.8 million in the year-ago quarter.

At the end of 2019, net cash provided by operating activities was $202 million compared with $223.5 million at the end of 2018.

2020 Guidance

Net service revenues are projected to range between $2.12 billion and $2.16 billion.
Adjusted EPS is expected to be in the band of $4.90-$5.13 (on the basis of an anticipated 33.4 million shares outstanding).

Adjusted EBITDA is estimated to be in the range of $250-$260 million.

Our Take

Amedisys ended the fourth quarter on a mixed note. At the Home Health and Hospice divisions, the company witnessed solid year-over-year growth in Medicare and non-Medicare revenues. Amedisys is currently exploring opportunities in these segments. We are also impressed by the company’s solid performance in the recently-launched Personal Care segment.  A favorable demographic trend and strategic acquisitions also bode well.

However, an intense competitive landscape and regulatory concerns pose challenges to the home health and hospice industry. Escalating costs and expenses remain woes.

Zacks Rank

Currently, Amedisys carries a Zacks Rank #3 (Hold).

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks — which reported solid results this earnings season — include Stryker Corporation SYK, Accuray Incorporated ARAY and IDEXX Laboratories, Inc. IDXX. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker reported fourth-quarter 2019 adjusted EPS of $2.49, outpacing the Zacks Consensus Estimate by 1.2%. Fourth-quarter reported revenues of $4.13 billion surpassed the Zacks Consensus Estimate by 0.7%. The company carries a Zacks Rank #2 (Buy).

Accuray reported second-quarter fiscal 2020 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss of 7 cents. Net revenues of $98.8 million outpaced the Zacks Consensus Estimate by 0.3%. The company sports a Zacks Rank #1.

IDEXX Laboratories reported fourth-quarter 2019 adjusted EPS of $1.04, which beat the Zacks Consensus Estimate of 91 cents by 14.3%. Revenues were $605.4 million, surpassing the Zacks Consensus Estimate by 0.9%. The company carries a Zacks Rank of 2.

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