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AMN Healthcare (AMN) Q2 Earnings Beat Estimates, Margins Down
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AMN Healthcare Services, Inc. (AMN - Free Report) delivered adjusted earnings per share (EPS) of 98 cents in the second quarter of 2024, which declined 58.8% year over year. However, the figure surpassed the Zacks Consensus Estimate by 30.7%.
GAAP EPS for the quarter was 42 cents, indicating a 72.9% plunge from the year-ago figure.
Revenues in Detail
AMN Healthcare registered revenues of $740.7 million in the second quarter, down 25.3% 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 second quarter of 2024, the Nurse and Allied Solutions segment’s revenues totaled $442.4 million, down 35.8% year over year. Travel nurse staffing revenues were down 42% year over year, whereas Allied revenues declined 17% year over year. This figure compares to our Nurse and Allied Solutions segment’s second-quarter projection of $430.7 million.
The Physician and Leadership Solutions segment’s revenues totaled $186.1 million, up 5.6% year over year on the back of a 17% uptick in locum tenens revenues, which amounted to $143 million (with growth coming primarily from the MSDR acquisition). Interim leadership revenues were down 17% year over year. Physician and leadership search businesses saw revenue decline by 27% year over year. This figure compares to our Physician and Leadership Solutions segment’s second-quarter projection of $194 million.
The Technology and Workforce Solutions segment’s revenues totaled $112.2 million, down 10.9% year over year. Language interpretation services business revenues came in at $75 million in the quarter (up 18% year over year), while the vendor management systems (VMS) business saw a 41% year-over-year revenue decline to reach $28 million. This figure compares to our Technology and Workforce Solutions segment’s second-quarter projection of $111 million.
AMN Healthcare Services Inc Price, Consensus and EPS Surprise
In the quarter under review, AMN Healthcare’s gross profit fell 30.4% to $229.8 million. The gross margin contracted 229 basis points (bps) to 31%. We had projected 31.2% of gross margin for the second quarter.
Selling, general & administrative expenses fell 26.1% to $149 million.
Adjusted operating profit totaled $80.8 million, reflecting a 37.1% decline from the prior-year quarter. The adjusted operating margin in the second quarter contracted 206 bps to 10.9%.
Financial Position
AMN Healthcare exited second-quarter 2024 with cash and cash equivalents of $48 million compared with $50.6 million at the first-quarter end. Total debt at the end of second-quarter 2024 was $1.195 billion compared with $1.275 billion at the first-quarter end.
Cumulative net cash provided by operating activities at the end of second-quarter 2024 was $99.5 million compared with $197.7 million a year ago.
Guidance
AMN Healthcare has provided its financial outlook for the third quarter of 2024.
For the third quarter, the company expects revenues in the range of $660 million-$680 million, reflecting a decline of 20-23% compared with the prior-year figure. The Zacks Consensus Estimate is pegged at $700 million.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to decline 32-34% in the third quarter from the prior-year figure. The Technology and Workforce Solutions segment’s revenues are expected to decline 10-12% in the third quarter from the prior-year figure.
The company projects third-quarter revenues at the Physician and Leadership Solutions segment to increase 12-14% from the prior-year figure.
Our Take
AMN Healthcare’s dismal top-line and bottom-line performances were disappointing. The decline in the majority of its segmental revenues during the reported quarter was worrying. The contraction of both margins raises our apprehension about the stock. AMN Healthcare expects to register a decline in its overall top line and the majority of its segments in the third quarter of 2024, which is concerning.
However, AMN Healthcare exited the second quarter of 2024 with better-than-expected results. The uptick in the Physician and Leadership Solutions segment’s revenues, locum tenens revenues and Language interpretation services revenues was impressive.
Management confirmed that growth in the VMS sales pipeline was boosted by ShiftWise Flex, while fill rates for third-party, direct and Managed Services Program orders continued to improve in the second quarter. The company has also observed promising signs of improvement in the travel nurse market. These look promising for the stock.
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 DaVita Inc. (DVA - Free Report) , Quest Diagnostics Incorporated (DGX - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
DaVita, carrying a Zacks Rank of 2 (Buy), reported second-quarter 2024 adjusted EPS of $2.59, beating the Zacks Consensus Estimate by 4.9%. Revenues of $3.19 billion outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita has a long-term estimated growth rate of 13.6%. DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 24.2%.
Quest Diagnostics reported second-quarter 2024 adjusted EPS of $2.35, beating the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion surpassed the Zacks Consensus Estimate by 0.5%. It currently carries a Zacks Rank #2.
Quest Diagnostics has a long-term estimated growth rate of 6.2%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%.
Boston Scientific reported second-quarter 2024 adjusted EPS of 62 cents, beating the Zacks Consensus Estimate by 6.9%. Revenues of $4.12 billion surpassed the Zacks Consensus Estimate by 2.5%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 12.6%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.
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AMN Healthcare (AMN) Q2 Earnings Beat Estimates, Margins Down
AMN Healthcare Services, Inc. (AMN - Free Report) delivered adjusted earnings per share (EPS) of 98 cents in the second quarter of 2024, which declined 58.8% year over year. However, the figure surpassed the Zacks Consensus Estimate by 30.7%.
GAAP EPS for the quarter was 42 cents, indicating a 72.9% plunge from the year-ago figure.
Revenues in Detail
AMN Healthcare registered revenues of $740.7 million in the second quarter, down 25.3% 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 second quarter of 2024, the Nurse and Allied Solutions segment’s revenues totaled $442.4 million, down 35.8% year over year. Travel nurse staffing revenues were down 42% year over year, whereas Allied revenues declined 17% year over year. This figure compares to our Nurse and Allied Solutions segment’s second-quarter projection of $430.7 million.
The Physician and Leadership Solutions segment’s revenues totaled $186.1 million, up 5.6% year over year on the back of a 17% uptick in locum tenens revenues, which amounted to $143 million (with growth coming primarily from the MSDR acquisition). Interim leadership revenues were down 17% year over year. Physician and leadership search businesses saw revenue decline by 27% year over year. This figure compares to our Physician and Leadership Solutions segment’s second-quarter projection of $194 million.
The Technology and Workforce Solutions segment’s revenues totaled $112.2 million, down 10.9% year over year. Language interpretation services business revenues came in at $75 million in the quarter (up 18% year over year), while the vendor management systems (VMS) business saw a 41% year-over-year revenue decline to reach $28 million. This figure compares to our Technology and Workforce Solutions segment’s second-quarter projection of $111 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 30.4% to $229.8 million. The gross margin contracted 229 basis points (bps) to 31%. We had projected 31.2% of gross margin for the second quarter.
Selling, general & administrative expenses fell 26.1% to $149 million.
Adjusted operating profit totaled $80.8 million, reflecting a 37.1% decline from the prior-year quarter. The adjusted operating margin in the second quarter contracted 206 bps to 10.9%.
Financial Position
AMN Healthcare exited second-quarter 2024 with cash and cash equivalents of $48 million compared with $50.6 million at the first-quarter end. Total debt at the end of second-quarter 2024 was $1.195 billion compared with $1.275 billion at the first-quarter end.
Cumulative net cash provided by operating activities at the end of second-quarter 2024 was $99.5 million compared with $197.7 million a year ago.
Guidance
AMN Healthcare has provided its financial outlook for the third quarter of 2024.
For the third quarter, the company expects revenues in the range of $660 million-$680 million, reflecting a decline of 20-23% compared with the prior-year figure. The Zacks Consensus Estimate is pegged at $700 million.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to decline 32-34% in the third quarter from the prior-year figure. The Technology and Workforce Solutions segment’s revenues are expected to decline 10-12% in the third quarter from the prior-year figure.
The company projects third-quarter revenues at the Physician and Leadership Solutions segment to increase 12-14% from the prior-year figure.
Our Take
AMN Healthcare’s dismal top-line and bottom-line performances were disappointing. The decline in the majority of its segmental revenues during the reported quarter was worrying. The contraction of both margins raises our apprehension about the stock. AMN Healthcare expects to register a decline in its overall top line and the majority of its segments in the third quarter of 2024, which is concerning.
However, AMN Healthcare exited the second quarter of 2024 with better-than-expected results. The uptick in the Physician and Leadership Solutions segment’s revenues, locum tenens revenues and Language interpretation services revenues was impressive.
Management confirmed that growth in the VMS sales pipeline was boosted by ShiftWise Flex, while fill rates for third-party, direct and Managed Services Program orders continued to improve in the second quarter. The company has also observed promising signs of improvement in the travel nurse market. These look promising for the stock.
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 DaVita Inc. (DVA - Free Report) , Quest Diagnostics Incorporated (DGX - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
DaVita, carrying a Zacks Rank of 2 (Buy), reported second-quarter 2024 adjusted EPS of $2.59, beating the Zacks Consensus Estimate by 4.9%. Revenues of $3.19 billion outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita has a long-term estimated growth rate of 13.6%. DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 24.2%.
Quest Diagnostics reported second-quarter 2024 adjusted EPS of $2.35, beating the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion surpassed the Zacks Consensus Estimate by 0.5%. It currently carries a Zacks Rank #2.
Quest Diagnostics has a long-term estimated growth rate of 6.2%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%.
Boston Scientific reported second-quarter 2024 adjusted EPS of 62 cents, beating the Zacks Consensus Estimate by 6.9%. Revenues of $4.12 billion surpassed the Zacks Consensus Estimate by 2.5%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 12.6%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.