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Amedisys (AMED) Q4 Earnings Top Estimates, Margins Decline

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Amedisys, Inc. (AMED - Free Report) reported adjusted earnings per share (EPS) of $1.18 for fourth-quarter 2021, down 20.8% from the year-ago figure. The bottom line, however, beat the Zacks Consensus Estimate by 0.9%.

The quarter’s adjustments include contingency accrual, certain COVID-related costs as well as benefits from CARES Act & State COVID-19 grants.

GAAP EPS for the fourth quarter was $1.04, down 23.5% compared with the year-ago $1.36.

Net service revenues grossed $559.3 million, up 1.6% year over year. The top line beat the Zacks Consensus Estimate by 0.7%.

2021 at a Glance

Adjusted EPS for the year was $5.95, down 2.6% from the 2020 levels. The figure also beat the consensus mark by 0.3%.

Full-year 2021 net service revenues totaled $2.21 billion, which improved 6.9% from the previous year. Further, the top line surpassed the Zacks Consensus Estimate by 0.5%.

Segment in Detail

Within the Home Health division, net service revenues totaled $337.3 million in the quarter, reflecting a 2.4% rise year over year. Within this segment, Medicare revenues of $230.1 million improved 0.8% year over year. Non-Medicare revenues increased 6% to $107.2 million.

Amedisys, Inc. Price, Consensus and EPS Surprise

 

Amedisys, Inc. Price, Consensus and EPS Surprise

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

Within the Hospice division, net service revenues were $204.9 million (up 0.5% year over year), including Medicare revenues of $193.9 million (up 0.2%) and non-Medicare revenues of $11 million (up 5.8%).

At Personal Care, net service revenues totaled $15.1 million, reflecting a decline of 13.2% from the year-ago number. The High Acuity Care segment reported net service revenues of $2 million in the fourth quarter. The Corporate segment did not register any recognizable revenue in the fourth quarter.

Margins

Gross profit for the company declined 0.7% to $242.1 million in the quarter under review. Gross margin contracted 101 basis points (bps) to 43.3%.

Expenses on salaries and benefits rose 5.1% to $125.2 million. Other expenses rose 8.5% to $53.7 million. Adjusted operating profit of $63.2 million reflected a 16.1% decline from the year-ago quarter. Adjusted operating margin contracted 237 bps to 11.3% from the prior-year level.

Liquidity and Cash Position

Amedisys exited 2021 with cash and cash equivalents of $42.7 million compared with $81.8 million at 2020-end. The company's long-term obligations (excluding the current portion) were $432.1 million at the end of 2021, compared with $204.5 million at the end of 2020.

Cumulative net cash provided by operating activities at the end of 2021 was $188.9 million compared with $288.9 million a year ago.

2022 Guidance

Amedisys announced its outlook for 2022.

For full-year 2022, the company anticipates net service revenues in the range of $2.330 billion to $2.365 billion. The Zacks Consensus Estimate for 2022 revenues is pegged at $2.36 billion.

Adjusted EPS is projected in the range of $5.23-$5.45. The Zacks Consensus Estimate for the same is pegged at $5.80.

Our Take

Amedisys ended the fourth quarter with better-than-expected earnings and revenues. The top line registered year-over-year growth on robust performances across the Home Health and Hospice segments. Further, improved revenues from the Medicare and Non-Medicare buoy optimism for the company.

However, a year-over-year decline in Personal Care revenues does not bode well. The contraction of both margins is another downside.

Zacks Rank and Key Picks

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

Some better-ranked stocks in the broader medical space that have announced their quarterly results are Henry Schein, Inc. (HSIC - Free Report) , GlaxoSmithKline plc (GSK - Free Report) and McKesson Corporation (MCK - Free Report) .

Henry Schein, carrying a Zacks Rank #1 (Strong Buy), reported fourth-quarter 2021 adjusted earnings of $1.07 per share, which beat the Zacks Consensus Estimate by 18.9%. Revenues of $3.33 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Henry Schein has an estimated long-term growth rate of 11.8%. HSIC has gained 35.4% versus the industry’s 7.9% growth in the past year.

GlaxoSmithKline, carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2021 adjusted earnings of 69 cents per American depositary share (ADS), which beat the Zacks Consensus Estimate by 9.5%. Revenues of $13 billion outpaced the consensus mark by 3%.

GlaxoSmithKline has an estimated long-term growth rate of 6.8%. GSK has gained 25.4% compared with the industry’s 15.6% growth in the past year.

McKesson, sporting a Zacks Rank #2, reported third-quarter fiscal 2022 adjusted EPS of $6.15, which beat the Zacks Consensus Estimate of $5.38 per share by 14.3%. Revenues of $68.61 billion surpassed the Zacks Consensus Estimate by 3.2%.

McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 54.1% versus the industry’s 7.9% growth in the past year.

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