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AMN Healthcare (AMN) Q3 Earnings and Revenues Beat Estimates
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AMN Healthcare Services, Inc. (AMN - Free Report) delivered adjusted earnings per share (EPS) of $1.97 in the third quarter of 2023, which declined 23.3% year over year. However, the figure surpassed the Zacks Consensus Estimate by 20.1%.
GAAP EPS for the quarter was $1.39, reflecting a 33.8% plunge from the year-ago figure.
Revenues in Detail
AMN Healthcare registered revenues of $853.5 million in the third quarter, down 25% year over year. However, the figure surpassed the Zacks Consensus Estimate by 0.3%.
Segment Details
AMN Healthcare conducts its business via three reportable segments — Nurse and Allied Solutions, Physician and Leadership Solutions and Technology and Workforce Solutions.
In the third quarter of 2023, the Nurse and Allied Solutions segment’s revenues totaled $573.4 million, down 30.8% year over year. Travel nurse staffing revenues were down 34% year over year, whereas Allied revenues declined 12% year over year. This figure compares to our Nurse and Allied Solutions segment’s third-quarter projection of $570.7 million.
The Physician and Leadership Solutions segment’s revenues totaled $159.6 million, down 8.9% year over year despite a 6% uptick in locum tenens revenues, which amounted to $113 million. Interim leadership revenues were down 35% year over year. Physician and leadership search businesses saw revenue decline by 25% year over year. This figure compares to our Physician and Leadership Solutions segment’s third-quarter projection of $169.7 million.
The Technology and Workforce Solutions segment’s revenues totaled $120.5 million, down 10.8% year over year. Language interpretation services business revenues came in at $66 million in the quarter (up 20% year over year), while the vendor management systems business saw a 37% year-over-year revenue decline to reach $38 million. This figure compares to our Technology and Workforce Solutions segment’s third-quarter projection of $109.7 million.
AMN Healthcare Services Inc Price, Consensus and EPS Surprise
In the quarter under review, AMN Healthcare’s gross profit fell 24.8% to $289.5 million. However, the gross margin expanded 11 basis points (bps) to 33.9%.
We had projected 33.4% of gross margin for the third quarter.
Selling, general & administrative expenses fell 24.1% to $163.4 million.
Adjusted operating profit totaled $126.1 million, reflecting a 25.7% decline from the prior-year quarter. The adjusted operating margin in the third quarter contracted 12 bps to 14.8%.
Financial Position
AMN Healthcare exited third-quarter 2023 with cash and cash equivalents of $29.4 million compared with $7 million at the end of the second quarter. Total debt at the end of third-quarter 2023 was $945 million compared with $1 billion at the end of the second quarter.
Cumulative net cash provided by operating activities at the end of third-quarter 2023 was $413.3 million compared with $538.4 million a year ago.
Guidance
AMN Healthcare has provided its financial outlook for the fourth quarter of 2023.
For the fourth quarter, the company expects revenues to be $ $790 million-$810 million, reflecting a decline of 28-30% compared with the prior-year figure. The Zacks Consensus Estimate stands at $847.1 million.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to decline 33-35% from the prior-year figure. The Technology and Workforce Solutions segment’s revenues are expected to decline 18% from the prior-year figure.
The company projects third-quarter revenues at the Physician and Leadership Solutions segment to decline 12-14% from the prior-year figure.
Our Take
AMN Healthcare exited the third quarter of 2023 with better-than-expected results. The uptick in locum tenens revenues and Language interpretation services revenues was impressive. The gross margin expansion bodes well for the stock.
Management confirmed that its definitive agreement to acquire MSDR will likely bolster AMN Healthcare’s presence in the robust locum tenens market. On the earnings call, management confirmed that the company had strengthened its ability to deliver multifaceted tech-enabled workforce solutions to simplify labor management and provide a variety of options for making the labor force more flexible and cost effective. Additionally, management believes that clients would be able to access AMN Healthcare’s full set of solutions via our better-integrated sales and service organization. These look promising for the stock.
However, AMN Healthcare’s dismal top-line and bottom-line performances were disappointing. The decline in all the segmental revenues during the reported quarter was worrying. The contraction of the adjusted operating margin raises our apprehension about the stock. AMN Healthcare expects to register a decline in its overall top line and all its segments in the fourth quarter of 2023, which is concerning.
Zacks Rank and Stocks to Consider
AMN Healthcare currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , DexCom, Inc. (DXCM - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
Abbott, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 3.6%. Revenues of $10.14 billion outpaced the consensus mark by 3.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.8%.
DexCom reported third-quarter 2023 adjusted EPS of 50 cents, beating the Zacks Consensus Estimate by 47.1%. Revenues of $975 million surpassed the Zacks Consensus Estimate by 4%. It currently carries a Zacks Rank #2.
DexCom has a long-term estimated growth rate of 33.6%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%.
Integer Holdings reported third-quarter 2023 adjusted EPS of $1.27, beating the Zacks Consensus Estimate by 20.9%. Revenues of $404.7 million surpassed the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 15.8%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.9%.
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AMN Healthcare (AMN) Q3 Earnings and Revenues Beat Estimates
AMN Healthcare Services, Inc. (AMN - Free Report) delivered adjusted earnings per share (EPS) of $1.97 in the third quarter of 2023, which declined 23.3% year over year. However, the figure surpassed the Zacks Consensus Estimate by 20.1%.
GAAP EPS for the quarter was $1.39, reflecting a 33.8% plunge from the year-ago figure.
Revenues in Detail
AMN Healthcare registered revenues of $853.5 million in the third quarter, down 25% year over year. However, the figure surpassed the Zacks Consensus Estimate by 0.3%.
Segment Details
AMN Healthcare conducts its business via three reportable segments — Nurse and Allied Solutions, Physician and Leadership Solutions and Technology and Workforce Solutions.
In the third quarter of 2023, the Nurse and Allied Solutions segment’s revenues totaled $573.4 million, down 30.8% year over year. Travel nurse staffing revenues were down 34% year over year, whereas Allied revenues declined 12% year over year. This figure compares to our Nurse and Allied Solutions segment’s third-quarter projection of $570.7 million.
The Physician and Leadership Solutions segment’s revenues totaled $159.6 million, down 8.9% year over year despite a 6% uptick in locum tenens revenues, which amounted to $113 million. Interim leadership revenues were down 35% year over year. Physician and leadership search businesses saw revenue decline by 25% year over year. This figure compares to our Physician and Leadership Solutions segment’s third-quarter projection of $169.7 million.
The Technology and Workforce Solutions segment’s revenues totaled $120.5 million, down 10.8% year over year. Language interpretation services business revenues came in at $66 million in the quarter (up 20% year over year), while the vendor management systems business saw a 37% year-over-year revenue decline to reach $38 million. This figure compares to our Technology and Workforce Solutions segment’s third-quarter projection of $109.7 million.
AMN Healthcare Services Inc Price, Consensus and EPS Surprise
AMN Healthcare Services Inc price-consensus-eps-surprise-chart | AMN Healthcare Services Inc Quote
Margin Trend
In the quarter under review, AMN Healthcare’s gross profit fell 24.8% to $289.5 million. However, the gross margin expanded 11 basis points (bps) to 33.9%.
We had projected 33.4% of gross margin for the third quarter.
Selling, general & administrative expenses fell 24.1% to $163.4 million.
Adjusted operating profit totaled $126.1 million, reflecting a 25.7% decline from the prior-year quarter. The adjusted operating margin in the third quarter contracted 12 bps to 14.8%.
Financial Position
AMN Healthcare exited third-quarter 2023 with cash and cash equivalents of $29.4 million compared with $7 million at the end of the second quarter. Total debt at the end of third-quarter 2023 was $945 million compared with $1 billion at the end of the second quarter.
Cumulative net cash provided by operating activities at the end of third-quarter 2023 was $413.3 million compared with $538.4 million a year ago.
Guidance
AMN Healthcare has provided its financial outlook for the fourth quarter of 2023.
For the fourth quarter, the company expects revenues to be $ $790 million-$810 million, reflecting a decline of 28-30% compared with the prior-year figure. The Zacks Consensus Estimate stands at $847.1 million.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to decline 33-35% from the prior-year figure. The Technology and Workforce Solutions segment’s revenues are expected to decline 18% from the prior-year figure.
The company projects third-quarter revenues at the Physician and Leadership Solutions segment to decline 12-14% from the prior-year figure.
Our Take
AMN Healthcare exited the third quarter of 2023 with better-than-expected results. The uptick in locum tenens revenues and Language interpretation services revenues was impressive. The gross margin expansion bodes well for the stock.
Management confirmed that its definitive agreement to acquire MSDR will likely bolster AMN Healthcare’s presence in the robust locum tenens market. On the earnings call, management confirmed that the company had strengthened its ability to deliver multifaceted tech-enabled workforce solutions to simplify labor management and provide a variety of options for making the labor force more flexible and cost effective. Additionally, management believes that clients would be able to access AMN Healthcare’s full set of solutions via our better-integrated sales and service organization. These look promising for the stock.
However, AMN Healthcare’s dismal top-line and bottom-line performances were disappointing. The decline in all the segmental revenues during the reported quarter was worrying. The contraction of the adjusted operating margin raises our apprehension about the stock. AMN Healthcare expects to register a decline in its overall top line and all its segments in the fourth quarter of 2023, which is concerning.
Zacks Rank and Stocks to Consider
AMN Healthcare currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , DexCom, Inc. (DXCM - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
Abbott, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 3.6%. Revenues of $10.14 billion outpaced the consensus mark by 3.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.8%.
DexCom reported third-quarter 2023 adjusted EPS of 50 cents, beating the Zacks Consensus Estimate by 47.1%. Revenues of $975 million surpassed the Zacks Consensus Estimate by 4%. It currently carries a Zacks Rank #2.
DexCom has a long-term estimated growth rate of 33.6%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%.
Integer Holdings reported third-quarter 2023 adjusted EPS of $1.27, beating the Zacks Consensus Estimate by 20.9%. Revenues of $404.7 million surpassed the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 15.8%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.9%.