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Chemed (CHE) Down 3.1% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Chemed (CHE - Free Report) . Shares have lost about 3.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Chemed due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Chemed Corporation reported adjusted earnings per share of $5.20 in the first quarter of 2024, up 21.5% year over year. However, the figure missed the Zacks Consensus Estimate by 4.9%.
The company’s GAAP earnings per share was $4.24, up 18.4% from last year’s reported figure.
Revenues in Detail
Revenues in the reported quarter improved 5.2% year over year to $589.2 million. The metric topped the Zacks Consensus Estimate by 0.3%.
Segmental Details
Chemed operates through two wholly owned subsidiaries — VITAS (a major provider of end-of-life care) and Roto-Rooter (a leading commercial and residential plumbing plus drain cleaning service provider).
VITAS
In the first quarter, net revenues totaled $354 million, up 14% year over year.
The rise in revenues was primarily due to an 11.5% increase in days of care and a rise in the geographically weighted average Medicare reimbursement rate of nearly 2.6%.
Roto-Rooter
The segment reported sales of $235.2 million in the first quarter, down 5.8% year over year.
Total Roto-Rooter branch commercial revenues decreased 10.5% from the last year. This consisted of a 9.9% decline in drain cleaning revenues, an 11.9% fall in plumbing, a 13% drop in excavation and a 2.5% decrease in water restoration.
Total Roto-Rooter branch residential revenues registered a decrease of 3.5% over the prior-year period. This aggregate residential revenue decline consisted of drain cleaning decreasing 5.6%, plumbing decreasing 1.1%, excavation expanding 1.5% and water restoration decreasing 8.5%.
Margins in Detail
The gross profit increased 7.7% year over year to $204.1 million in the first quarter of 2024. The gross margin expanded 82 basis points (bps) year over year to 34.6% despite a 3.9% increase in the cost of products and services.
The adjusted operating profit fell 1.3% from the year-ago period to $88.2 million. The adjusted operating margin contracted 98 bps to 15% on an increase of 15.8% in adjusted operating expenses.
Liquidity & Capital Structure
Chemed exited the first quarter with cash and cash equivalents of $313.4 million compared to $264 million at 2023-end. The company did not have any long-term debt at the quarter end.
The cumulative net cash provided by operating activities at the end of the first quarter of 2024 was $84.5 million compared with $60.5 million in the year-ago comparable period.
During the quarter, the company repurchased 50,000 shares of Chemed stock for $32.3 million, which equates to a cost per share of $646.87. As of Mar 31, 2024, there was approximately $281.7 million of remaining share repurchase authorization under its plan.
Chemed has a consistent dividend-paying history, with the five-year annualized dividend growth being 5.87%.
2024 Guidance
Chemed reiterated its financial outlook for 2024, which it originally provided during the 2023 fourth-quarter earnings call.
The company anticipates 2024 revenues from VITAS, prior to Medicare Cap, to increase in the range of 9%-9.8% from the prior year (unchanged). Roto-Rooter is expected to achieve 2024 revenue growth in the range of 3.5 (unchanged).
For 2024, the Zacks Consensus Estimate for total revenues is pegged at $2.42 billion, which suggests 7% growth from the 2024 reported figure.
For the full-year 2024, the adjusted earnings per share is estimated in the range of $23.30-$23.70 (same as earlier). The Zacks Consensus Estimate for the metric is pegged at $23.51, which implies 15.8% growth over the 2023 adjusted figure.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Chemed has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Chemed has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Chemed (CHE) Down 3.1% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Chemed (CHE - Free Report) . Shares have lost about 3.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Chemed due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Chemed Misses Q1 Earnings Estimates, Reaffirms 2024 View
Chemed Corporation reported adjusted earnings per share of $5.20 in the first quarter of 2024, up 21.5% year over year. However, the figure missed the Zacks Consensus Estimate by 4.9%.
The company’s GAAP earnings per share was $4.24, up 18.4% from last year’s reported figure.
Revenues in Detail
Revenues in the reported quarter improved 5.2% year over year to $589.2 million. The metric topped the Zacks Consensus Estimate by 0.3%.
Segmental Details
Chemed operates through two wholly owned subsidiaries — VITAS (a major provider of end-of-life care) and Roto-Rooter (a leading commercial and residential plumbing plus drain cleaning service provider).
VITAS
In the first quarter, net revenues totaled $354 million, up 14% year over year.
The rise in revenues was primarily due to an 11.5% increase in days of care and a rise in the geographically weighted average Medicare reimbursement rate of nearly 2.6%.
Roto-Rooter
The segment reported sales of $235.2 million in the first quarter, down 5.8% year over year.
Total Roto-Rooter branch commercial revenues decreased 10.5% from the last year. This consisted of a 9.9% decline in drain cleaning revenues, an 11.9% fall in plumbing, a 13% drop in excavation and a 2.5% decrease in water restoration.
Total Roto-Rooter branch residential revenues registered a decrease of 3.5% over the prior-year period. This aggregate residential revenue decline consisted of drain cleaning decreasing 5.6%, plumbing decreasing 1.1%, excavation expanding 1.5% and water restoration decreasing 8.5%.
Margins in Detail
The gross profit increased 7.7% year over year to $204.1 million in the first quarter of 2024. The gross margin expanded 82 basis points (bps) year over year to 34.6% despite a 3.9% increase in the cost of products and services.
The adjusted operating profit fell 1.3% from the year-ago period to $88.2 million. The adjusted operating margin contracted 98 bps to 15% on an increase of 15.8% in adjusted operating expenses.
Liquidity & Capital Structure
Chemed exited the first quarter with cash and cash equivalents of $313.4 million compared to $264 million at 2023-end. The company did not have any long-term debt at the quarter end.
The cumulative net cash provided by operating activities at the end of the first quarter of 2024 was $84.5 million compared with $60.5 million in the year-ago comparable period.
During the quarter, the company repurchased 50,000 shares of Chemed stock for $32.3 million, which equates to a cost per share of $646.87. As of Mar 31, 2024, there was approximately $281.7 million of remaining share repurchase authorization under its plan.
Chemed has a consistent dividend-paying history, with the five-year annualized dividend growth being 5.87%.
2024 Guidance
Chemed reiterated its financial outlook for 2024, which it originally provided during the 2023 fourth-quarter earnings call.
The company anticipates 2024 revenues from VITAS, prior to Medicare Cap, to increase in the range of 9%-9.8% from the prior year (unchanged). Roto-Rooter is expected to achieve 2024 revenue growth in the range of 3.5 (unchanged).
For 2024, the Zacks Consensus Estimate for total revenues is pegged at $2.42 billion, which suggests 7% growth from the 2024 reported figure.
For the full-year 2024, the adjusted earnings per share is estimated in the range of $23.30-$23.70 (same as earlier). The Zacks Consensus Estimate for the metric is pegged at $23.51, which implies 15.8% growth over the 2023 adjusted figure.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Chemed has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Chemed has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.