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Pediatrix (MD) Q1 Earnings Beat on Hospital Contract Fees
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Pediatrix Medical Group, Inc. (MD - Free Report) reported first-quarter 2024 adjusted earnings per share (EPS) of 20 cents, which outpaced the Zacks Consensus Estimate by 11.1%. However, the bottom line declined 13% year over year.
Net revenues inched up 0.8% year over year to $495.1 million on the back of growth in same-unit revenues. Yet, the top line fell short of the consensus mark by a whisker.
The quarterly results gained on the back of higher patient volumes and improved hospital contract administrative fees. However, the upside was partly offset by an increased expense level resulting from rising practice salaries and benefits, and transformational and restructuring-related costs.
Pediatrix Medical Group, Inc. Price, Consensus and EPS Surprise
Overall same-unit revenues advanced 2.3% year over year. Same-unit revenues, attributable to patient volume, grew 1.3% year over year.
Same-unit revenues from net reimbursement-related factors inched up 1%, attributable to decent growth in hospital contract administrative fees.
MD’s total operating costs of $479.2 million increased 4% year over year, higher than our estimate of $474.9 million. The rise was due to higher practice salaries and benefits, practice supplies and other operating expenses, and general and administrative expenses, coupled with the incurrence of transformational and restructuring-related expenses in the first quarter.
Practice salaries and benefits, and general and administrative costs increased 1.9% each on a year-over-year basis. Meanwhile, practice supplies and other operating expenses witnessed an uptick of 1.2% year over year. Our estimates indicated the three expense components to increase 2.1%, 0.5% and 0.6%, respectively, on a year-over-year basis.
Transformational and restructuring-related costs of $8.5 million stemmed from position eliminations and revenue cycle management transition activities.
Interest expenses of $10.6 million rose 2% year over year and came higher than our estimate of $10.1 million.
Pediatrix generated a net income of $4 million, which plunged 71.6% year over year.
Adjusted EBITDA fell 7.1% year over year to $37.2 million but beat our estimate of $36.8 million.
Financial Update (as of Mar 31, 2024)
Pediatrix exited the first quarter with cash and cash equivalents of $8 million, which declined more than nine-fold from the 2023-end level. It had a leftover capacity of $80 million in borrowings as part of its revolving credit facility at the quarter end.
Total assets of $2.2 billion slipped 2.3% from the figure at 2023 end.
Total debt, including finance leases, net, amounted to $709.8 million, which escalated 12.1% from the figure as of Dec 31, 2023.
Total shareholders’ equity of $856.2 million inched up 0.8% from the 2023-end level.
Net cash used in operating activities was $125.2 million while the cash usage totaled $100.9 million in the prior-year quarter.
Share Repurchase Update
Pediatrix bought back a nominal number of its common shares for $0.9 million in the first quarter. It had a leftover capacity of $3.7 million under its $500 million repurchase program (approved in August 2018) as of Mar 31, 2024.
2024 View
Management continues to forecast adjusted EBITDA between $200 million and $220 million for 2024, out of which 24-25% will be contributed in the second quarter of 2024. The mid-point of the annual guidance indicates a 4.8% improvement from the 2023 reported figure.
Interest expense continues to be estimated within the range of $39.9-$40.6 million, the mid-point of which suggests a 4.4% fall from the 2023 figure.
Depreciation and amortization expenses are reaffirmed to stay at $39 million.
Transformational and restructuring-related expenses continue to be expected at $25 million. Income tax expense continues to be forecasted to stay within the range of $26.65-$32.40 million.
Net income is estimated to be between $68.75 million and $83.70 million.
For this year, general and administrative costs, as a percentage of revenues, are likely to stay in line or lower than the 2023 level.
Of the Medical sector players that have reported first-quarter 2024 results so far, the bottom-line results of The Ensign Group, Inc. (ENSG - Free Report) , Centene Corporation (CNC - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) beat the respective Zacks Consensus Estimate.
Ensign Group reported a first-quarter 2024 adjusted EPS of $1.30, which beat the Zacks Consensus Estimate of $1.29. The bottom line advanced 15% year over year. Operating revenues of $1 billion improved 13.9% year over year. The top line outpaced the consensus mark by 0.5%. Adjusted net income grew 16.6% to $75.4 million. Same-store occupancy improved 210 basis points (bps) while transitioning occupancy expanded 220 bps year over year.
The Skilled Services segment’s revenues rose 13.9% to $969.6 million. Segment income of $126.8 million improved 11.9% year over year. Skilled nursing and campus operations of the segment totaled 264 and 27, respectively, at the first-quarter end. In the Standard Bearer unit, rental revenues amounted to $22.2 million, which grew 12.6%. Segmental income of $7.3 million advanced 0.5% year over year. Funds from Operations were $14.1 million, which improved 6.8% year over year.
Centene recorded first-quarter adjusted EPS of $2.26, which outpaced the Zacks Consensus Estimate by 8.1%. The bottom line improved 7.1% year over year. Revenues advanced 3.9% to $40.4 billion. The top line beat the consensus mark by 11%. Revenues from Medicaid amounted to $21.5 billion, which slipped 3% year over year, while Medicare revenues inched up 1% to $5.9 billion.
Additionally, commercial revenues of $7.8 billion climbed 48% year over year. Premiums of CNC rose 5% to $35.5 billion. Service revenues of $808 million declined 28.3% year over year. As of Mar 31, 2024, total memberships were 28.4 million, which dipped marginally year over year. Adjusted net earnings grew 4.1% to $1.22 billion.
Molina Healthcare reported first-quarter 2024 adjusted EPS of $5.73, which beat the Zacks Consensus Estimate by 5%. However, the bottom line dipped 1.4% year over year. Total revenues amounted to $9.9 billion, which improved 21.9% year over year. Also, the top line outpaced the consensus mark by 4.3%. Premium revenues of $9.5 billion climbed 21% year over year.
Investment income soared 52.1% to $108 million. Adjusted general and administrative expense ratio deteriorated 10 bps year over year to 7.1%. MOH’s adjusted net income dipped 0.9% year over year to $334 million. The consolidated MCR (medical costs as a percentage of premium revenues) was 88.5%. The metric deteriorated 140 bps year over year. As of Mar 31, 2024, total memberships advanced 9% to around 5.7 million.
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Pediatrix (MD) Q1 Earnings Beat on Hospital Contract Fees
Pediatrix Medical Group, Inc. (MD - Free Report) reported first-quarter 2024 adjusted earnings per share (EPS) of 20 cents, which outpaced the Zacks Consensus Estimate by 11.1%. However, the bottom line declined 13% year over year.
Net revenues inched up 0.8% year over year to $495.1 million on the back of growth in same-unit revenues. Yet, the top line fell short of the consensus mark by a whisker.
The quarterly results gained on the back of higher patient volumes and improved hospital contract administrative fees. However, the upside was partly offset by an increased expense level resulting from rising practice salaries and benefits, and transformational and restructuring-related costs.
Pediatrix Medical Group, Inc. Price, Consensus and EPS Surprise
Pediatrix Medical Group, Inc. price-consensus-eps-surprise-chart | Pediatrix Medical Group, Inc. Quote
Q1 Update
Overall same-unit revenues advanced 2.3% year over year. Same-unit revenues, attributable to patient volume, grew 1.3% year over year.
Same-unit revenues from net reimbursement-related factors inched up 1%, attributable to decent growth in hospital contract administrative fees.
MD’s total operating costs of $479.2 million increased 4% year over year, higher than our estimate of $474.9 million. The rise was due to higher practice salaries and benefits, practice supplies and other operating expenses, and general and administrative expenses, coupled with the incurrence of transformational and restructuring-related expenses in the first quarter.
Practice salaries and benefits, and general and administrative costs increased 1.9% each on a year-over-year basis. Meanwhile, practice supplies and other operating expenses witnessed an uptick of 1.2% year over year. Our estimates indicated the three expense components to increase 2.1%, 0.5% and 0.6%, respectively, on a year-over-year basis.
Transformational and restructuring-related costs of $8.5 million stemmed from position eliminations and revenue cycle management transition activities.
Interest expenses of $10.6 million rose 2% year over year and came higher than our estimate of $10.1 million.
Pediatrix generated a net income of $4 million, which plunged 71.6% year over year.
Adjusted EBITDA fell 7.1% year over year to $37.2 million but beat our estimate of $36.8 million.
Financial Update (as of Mar 31, 2024)
Pediatrix exited the first quarter with cash and cash equivalents of $8 million, which declined more than nine-fold from the 2023-end level. It had a leftover capacity of $80 million in borrowings as part of its revolving credit facility at the quarter end.
Total assets of $2.2 billion slipped 2.3% from the figure at 2023 end.
Total debt, including finance leases, net, amounted to $709.8 million, which escalated 12.1% from the figure as of Dec 31, 2023.
Total shareholders’ equity of $856.2 million inched up 0.8% from the 2023-end level.
Net cash used in operating activities was $125.2 million while the cash usage totaled $100.9 million in the prior-year quarter.
Share Repurchase Update
Pediatrix bought back a nominal number of its common shares for $0.9 million in the first quarter. It had a leftover capacity of $3.7 million under its $500 million repurchase program (approved in August 2018) as of Mar 31, 2024.
2024 View
Management continues to forecast adjusted EBITDA between $200 million and $220 million for 2024, out of which 24-25% will be contributed in the second quarter of 2024. The mid-point of the annual guidance indicates a 4.8% improvement from the 2023 reported figure.
Interest expense continues to be estimated within the range of $39.9-$40.6 million, the mid-point of which suggests a 4.4% fall from the 2023 figure.
Depreciation and amortization expenses are reaffirmed to stay at $39 million.
Transformational and restructuring-related expenses continue to be expected at $25 million. Income tax expense continues to be forecasted to stay within the range of $26.65-$32.40 million.
Net income is estimated to be between $68.75 million and $83.70 million.
For this year, general and administrative costs, as a percentage of revenues, are likely to stay in line or lower than the 2023 level.
Zacks Rank
Pediatrix 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 2024 results so far, the bottom-line results of The Ensign Group, Inc. (ENSG - Free Report) , Centene Corporation (CNC - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) beat the respective Zacks Consensus Estimate.
Ensign Group reported a first-quarter 2024 adjusted EPS of $1.30, which beat the Zacks Consensus Estimate of $1.29. The bottom line advanced 15% year over year. Operating revenues of $1 billion improved 13.9% year over year. The top line outpaced the consensus mark by 0.5%. Adjusted net income grew 16.6% to $75.4 million. Same-store occupancy improved 210 basis points (bps) while transitioning occupancy expanded 220 bps year over year.
The Skilled Services segment’s revenues rose 13.9% to $969.6 million. Segment income of $126.8 million improved 11.9% year over year. Skilled nursing and campus operations of the segment totaled 264 and 27, respectively, at the first-quarter end. In the Standard Bearer unit, rental revenues amounted to $22.2 million, which grew 12.6%. Segmental income of $7.3 million advanced 0.5% year over year. Funds from Operations were $14.1 million, which improved 6.8% year over year.
Centene recorded first-quarter adjusted EPS of $2.26, which outpaced the Zacks Consensus Estimate by 8.1%. The bottom line improved 7.1% year over year. Revenues advanced 3.9% to $40.4 billion. The top line beat the consensus mark by 11%. Revenues from Medicaid amounted to $21.5 billion, which slipped 3% year over year, while Medicare revenues inched up 1% to $5.9 billion.
Additionally, commercial revenues of $7.8 billion climbed 48% year over year. Premiums of CNC rose 5% to $35.5 billion. Service revenues of $808 million declined 28.3% year over year. As of Mar 31, 2024, total memberships were 28.4 million, which dipped marginally year over year. Adjusted net earnings grew 4.1% to $1.22 billion.
Molina Healthcare reported first-quarter 2024 adjusted EPS of $5.73, which beat the Zacks Consensus Estimate by 5%. However, the bottom line dipped 1.4% year over year. Total revenues amounted to $9.9 billion, which improved 21.9% year over year. Also, the top line outpaced the consensus mark by 4.3%. Premium revenues of $9.5 billion climbed 21% year over year.
Investment income soared 52.1% to $108 million. Adjusted general and administrative expense ratio deteriorated 10 bps year over year to 7.1%. MOH’s adjusted net income dipped 0.9% year over year to $334 million. The consolidated MCR (medical costs as a percentage of premium revenues) was 88.5%. The metric deteriorated 140 bps year over year. As of Mar 31, 2024, total memberships advanced 9% to around 5.7 million.