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LHC Group (LHCG) Q4 Earnings Beat Estimates, Revenues Miss
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LHC Group, Inc.’s fourth-quarter 2020 adjusted earnings per share (EPS) of $1.40 surpassed the Zacks Consensus Estimate of $1.37 by 2.2%. Moreover, the bottom line improved 21.7% year over year.
For the full-year 2020, the company reported adjusted EPS of 5.01, up 12.1% from the previous year. The figure beat the consensus mark by 0.2%.
Revenue Details
The company reported net service revenues of $532.3 million in the quarter, which missed the Zacks Consensus Estimate by 0.3%. Nonetheless, the top line inched up 0.2% on a year-over-year basis.
For the full-year 2020, the company delivered net service revenues of $2.06 billion, which matched the consensus mark but were down 0.8%.
Q4 Highlights
In the quarter under review, total organic growth in home health admissions rose 2.2% year over year, while organic growth in hospice admissions climbed 10.9%.
However, home health service revenues were $382.6 million, down 1.8% year over year. Meanwhile, hospice services revenues amounted to $62.4 million, up 7.4%.
Business Update
On Oct 1, 2020, the company finalized a joint venture (JV) with University Health Care System to bolster home health and hospice services in Georgia and South Carolina. The company anticipates this joint venture to account for almost $8.3 million in incremental annualized revenues. In the same month, the company finalized a JV with Northeast Georgia Health System in order to share ownership of SunCrest Home Health in Gainesville, GA.
On Nov 1, 2020, LHC Group finalized an expansion of JV with CHRISTUS Health via an agreement of adding a hospice provider in San Marcos, TX. The company anticipates this JV to account for almost $1.6 million in incremental annualized revenues.
On Dec 31, 2020, announced its decision to acquire Tulsa, OK-based Grace Hospice of Oklahoma and Mesa, AZ-based Valley Hospice and East Valley Palliative Care. The company anticipates the purchase Grace Hospice to generate almost $12.1 million in annualized revenues, while Valley Hospice and East Valley Palliative Care to generate about $4.8 million in annualized revenues.
Margin Analysis
Gross profit in the quarter totaled $215.1 million, up 14.4%. Gross margin in the reported quarter was 40.4%, which expanded 500 basis points (bps) on a year-over-year basis.
Operating profit was $50.9 million, up 56.8% from the prior-year quarter. Operating margin was 9.6%, down 350 bps.
2021 Guidance
For first-quarter 2021 the company anticipates net service revenues to be $515-$530 million. The Zacks Consensus Estimate for the same is pegged at $543.2 million.
Adjusted EPS is projected to be $1.20-$1.30. The consensus mark for the same is pegged at $1.39 per share.
For full-year 2021, the company projects net service revenues between $2.2 and $2.26 billion. The Zacks Consensus Estimate for the same is pegged at $2.24 billion.
Adjusted EPS is projected to be $5.65-$5.90. The consensus mark for the same stands at $5.99 per share.
Wrapping Up
LHC Group exited the fourth quarter on a mixed note. The company continues to gain from home health and hospice admissions with both witnessing organic growth on a year-over-year basis. Increase in the bottom line buoys optimism. LHC Group is also anticipated to benefit from JVs. Expansion is gross margin is encouraging.
However, the company witnessed decline in home health service revenues in the quarter under review. Also, contraction in operating margin raises concern. Further, a highly competitive home healthcare market remains a woe.
Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, which surpassed the Zacks Consensus Estimate by 33.6%.
Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which beat the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%.
AngioDynamics reported second-quarter fiscal 2021 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss per share of 2 cents. Revenues of $72.8 million beat the consensus mark by 8%.
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LHC Group (LHCG) Q4 Earnings Beat Estimates, Revenues Miss
LHC Group, Inc.’s fourth-quarter 2020 adjusted earnings per share (EPS) of $1.40 surpassed the Zacks Consensus Estimate of $1.37 by 2.2%. Moreover, the bottom line improved 21.7% year over year.
For the full-year 2020, the company reported adjusted EPS of 5.01, up 12.1% from the previous year. The figure beat the consensus mark by 0.2%.
Revenue Details
The company reported net service revenues of $532.3 million in the quarter, which missed the Zacks Consensus Estimate by 0.3%. Nonetheless, the top line inched up 0.2% on a year-over-year basis.
LHC Group, Inc. Price, Consensus and EPS Surprise
LHC Group, Inc. price-consensus-eps-surprise-chart | LHC Group, Inc. Quote
For the full-year 2020, the company delivered net service revenues of $2.06 billion, which matched the consensus mark but were down 0.8%.
Q4 Highlights
In the quarter under review, total organic growth in home health admissions rose 2.2% year over year, while organic growth in hospice admissions climbed 10.9%.
However, home health service revenues were $382.6 million, down 1.8% year over year. Meanwhile, hospice services revenues amounted to $62.4 million, up 7.4%.
Business Update
On Oct 1, 2020, the company finalized a joint venture (JV) with University Health Care System to bolster home health and hospice services in Georgia and South Carolina. The company anticipates this joint venture to account for almost $8.3 million in incremental annualized revenues. In the same month, the company finalized a JV with Northeast Georgia Health System in order to share ownership of SunCrest Home Health in Gainesville, GA.
On Nov 1, 2020, LHC Group finalized an expansion of JV with CHRISTUS Health via an agreement of adding a hospice provider in San Marcos, TX. The company anticipates this JV to account for almost $1.6 million in incremental annualized revenues.
On Dec 31, 2020, announced its decision to acquire Tulsa, OK-based Grace Hospice of Oklahoma and Mesa, AZ-based Valley Hospice and East Valley Palliative Care. The company anticipates the purchase Grace Hospice to generate almost $12.1 million in annualized revenues, while Valley Hospice and East Valley Palliative Care to generate about $4.8 million in annualized revenues.
Margin Analysis
Gross profit in the quarter totaled $215.1 million, up 14.4%. Gross margin in the reported quarter was 40.4%, which expanded 500 basis points (bps) on a year-over-year basis.
Operating profit was $50.9 million, up 56.8% from the prior-year quarter. Operating margin was 9.6%, down 350 bps.
2021 Guidance
For first-quarter 2021 the company anticipates net service revenues to be $515-$530 million. The Zacks Consensus Estimate for the same is pegged at $543.2 million.
Adjusted EPS is projected to be $1.20-$1.30. The consensus mark for the same is pegged at $1.39 per share.
For full-year 2021, the company projects net service revenues between $2.2 and $2.26 billion. The Zacks Consensus Estimate for the same is pegged at $2.24 billion.
Adjusted EPS is projected to be $5.65-$5.90. The consensus mark for the same stands at $5.99 per share.
Wrapping Up
LHC Group exited the fourth quarter on a mixed note. The company continues to gain from home health and hospice admissions with both witnessing organic growth on a year-over-year basis. Increase in the bottom line buoys optimism. LHC Group is also anticipated to benefit from JVs. Expansion is gross margin is encouraging.
However, the company witnessed decline in home health service revenues in the quarter under review. Also, contraction in operating margin raises concern. Further, a highly competitive home healthcare market remains a woe.
Zacks Rank
LHC Group carries a Zacks Rank #3 (Hold).
Earnings of Other MedTech Majors at a Glance
Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Hologic, Inc. (HOLX - Free Report) , Abbott Laboratories (ABT - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, which surpassed the Zacks Consensus Estimate by 33.6%.
Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which beat the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%.
AngioDynamics reported second-quarter fiscal 2021 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss per share of 2 cents. Revenues of $72.8 million beat the consensus mark by 8%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
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