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Ensign Group Q3 Earnings Beat on Patient Days, Stock Up 4.1%
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Shares of The Ensign Group, Inc. (ENSG - Free Report) gained 4.1% since it reported third-quarter 2024 results on Oct. 24, 2024. Strong quarterly results benefited from improved occupancy and higher skilled service revenues. Higher skilled mix days due to an improvement across all payers benefited the results. However, a rise in overall expenses and declining cash flow from operations acted as a partial offset.
ENSG reported a third-quarter 2024 adjusted earnings per share (EPS) of $1.39, which beat the Zacks Consensus Estimate by 1.5%. The bottom line increased 15.8% year over year.
Operating revenues of $1.08 billion improved 15% year over year in the quarter under review. The top line outpaced the consensus mark by 1.7%.
The Ensign Group, Inc. Price, Consensus and EPS Surprise
Ensign Group’s adjusted net income grew 17.7% year over year to $81.1 million in the third quarter and beat our estimate of $79.4 million.
Same-store occupancy improved 280 basis points (bps) year over year while transitioning occupancy expanded 480 bps year over year.
Total expenses of $992.4 million escalated 15.3% year over year in the quarter under review and came higher than our estimate of $975.7 million. The year-over-year increase was due to higher costs of services, general and administrative expenses, and rent.
Segmental Update
Skilled Services: The segment’s revenues rose 14.4% year over year to $1 billion in the third quarter and matched our estimate. The metric was supported by improved occupancy and improved patient days. Segment income of $128.5 million improved 9.1% year over year.
Skilled nursing and campus operations of the segment totaled 282 and 29, respectively, at the third-quarter end.
Standard Bearer: Rental revenues amounted to $24.4 million, which grew 16.4% year over year and outpaced our estimate of $23.8 million. The metric was supported by rising acquisitions. Segmental income of $7.3 million rose 1.5% year over year.
Funds from Operations were $14.8 million in the third quarter, which improved 8.6% year over year.
Financial Update (as of Sept. 30, 2024)
Ensign Group exited the third quarter with cash and cash equivalents of $532.1 million, which increased 4.4% from the 2023-end figure. It had a leftover capacity of $572.1 million under its line of credit at the third-quarter end.
Total assets of $4.6 billion rose 10.8% from the 2023-end level.
Long-term debt-less current maturities were $142.6 million, which declined 2% from the figure as of Dec. 31, 2023. Current maturities of long-term debt amounted to $4.1 million.
Total equity of $1.8 billion climbed nearly 16.9% from the 2023-end figure.
ENSG generated net cash from operations of $246.7 million in the first nine months of 2024, which declined 15.3% from the year-ago figure.
Capital-Deployment Update
Ensign Group did not buy back shares in the first nine months of 2024. In the same time frame, management paid dividends worth $10.2 million.
2024 Outlook Raised
Revenues are anticipated to lie within $4.25-$4.26 billion, the mid-point of which indicates an improvement of 14.1% from the 2023 figure of $3.73 billion.
Adjusted EPS is forecasted to be between $5.46 and $5.52 for 2024, the midpoint of which suggests more than 15.1% growth from the 2023 figure of $4.77.
The weighted average common shares outstanding is estimated to be around 58.5 million, and the tax rate is assumed to be 25% for 2024.
Of the Medical sector players that have reported third-quarter 2024 results so far, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) , Molina Healthcare, Inc. (MOH - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) beat the Zacks Consensus Estimate.
UnitedHealth Group reported third-quarter adjusted EPS of $7.15, which surpassed the Zacks Consensus Estimate by 1.9%. The bottom line improved 9% year over year. Revenues rose 9.1% year over year to $100.8 billion. The top line beat the consensus mark by 1.3%. Its medical care ratio was 85.2%, which deteriorated 290 bps year over year. UNH’s operating earnings grew 2.4% year over year to $8.7 billion. However, the net margin deteriorated 30 bps year over year to 6%.
Revenues from the health benefits business of UnitedHealth, UnitedHealthcare, advanced 7.2% year over year to $74.9 billion. Earnings from operations amounted to $4.2 billion, down 8.7% year over year. Revenues in the Optum business line were $63.9 billion, which rose 12.7% year over year. Optum’s earnings from operations climbed 15.4% year over year to $4.5 billion. The UnitedHealthcare business catered to 50.7 million people as of Sept. 30, 2024, which fell 4% year over year.
Molina Healthcare’s third-quarter adjusted EPS of $6.01 beat the Zacks Consensus Estimate of $5.96. The bottom line grew 19% from the year-ago period. Total revenues amounted to $10.3 billion, which improved 20.9% year over year. The top line outpaced the consensus mark by 3.8%. Premium revenues of $9.7 billion increased 18% year over year.
As of Sept. 30, 2024, total membership improved 8% year over year to around 5.6 million. Investment income rose 5.4% year over year to $118 million and beat the consensus mark of $117.1 million. The consolidated medical care, or MCR, was 89.2%. The metric rose from 88.7% a year ago. Molina Healthcare’s adjusted net income increased 18% year over year to $347 million.
Intuitive Surgical reported third-quarter adjusted EPS of $1.84, which beat the Zacks Consensus Estimate of $1.65 by 11.5%. The bottom line improved 26% year over year. The company reported revenues of $2.04 billion, up 17% from the prior-year quarter, on a reported, as well as a constant currency basis. The top line also beat the Zacks Consensus Estimate by 1.2%. Revenues from the Instruments & Accessories segment totaled $1.26 billion, indicating a year-over-year improvement of 18%.
The Systems segment’s revenues totaled $445 million, up 17.4% year over year. Intuitive Surgical shipped 341 da Vinci Surgical Systems compared with 379 in the prior-year quarter. Revenues from the Services segment amounted to $328.9 million, up 3.7% from the year-ago quarter’s level. Adjusted gross profit was $1.41 billion, up 17.3% year over year. Adjusted operating income totaled $754.9 million, up 21% year over year.
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Ensign Group Q3 Earnings Beat on Patient Days, Stock Up 4.1%
Shares of The Ensign Group, Inc. (ENSG - Free Report) gained 4.1% since it reported third-quarter 2024 results on Oct. 24, 2024. Strong quarterly results benefited from improved occupancy and higher skilled service revenues. Higher skilled mix days due to an improvement across all payers benefited the results. However, a rise in overall expenses and declining cash flow from operations acted as a partial offset.
ENSG reported a third-quarter 2024 adjusted earnings per share (EPS) of $1.39, which beat the Zacks Consensus Estimate by 1.5%. The bottom line increased 15.8% year over year.
Operating revenues of $1.08 billion improved 15% year over year in the quarter under review. The top line outpaced the consensus mark by 1.7%.
The Ensign Group, Inc. Price, Consensus and EPS Surprise
The Ensign Group, Inc. price-consensus-eps-surprise-chart | The Ensign Group, Inc. Quote
Q3 Update
Ensign Group’s adjusted net income grew 17.7% year over year to $81.1 million in the third quarter and beat our estimate of $79.4 million.
Same-store occupancy improved 280 basis points (bps) year over year while transitioning occupancy expanded 480 bps year over year.
Total expenses of $992.4 million escalated 15.3% year over year in the quarter under review and came higher than our estimate of $975.7 million. The year-over-year increase was due to higher costs of services, general and administrative expenses, and rent.
Segmental Update
Skilled Services: The segment’s revenues rose 14.4% year over year to $1 billion in the third quarter and matched our estimate. The metric was supported by improved occupancy and improved patient days. Segment income of $128.5 million improved 9.1% year over year.
Skilled nursing and campus operations of the segment totaled 282 and 29, respectively, at the third-quarter end.
Standard Bearer: Rental revenues amounted to $24.4 million, which grew 16.4% year over year and outpaced our estimate of $23.8 million. The metric was supported by rising acquisitions. Segmental income of $7.3 million rose 1.5% year over year.
Funds from Operations were $14.8 million in the third quarter, which improved 8.6% year over year.
Financial Update (as of Sept. 30, 2024)
Ensign Group exited the third quarter with cash and cash equivalents of $532.1 million, which increased 4.4% from the 2023-end figure. It had a leftover capacity of $572.1 million under its line of credit at the third-quarter end.
Total assets of $4.6 billion rose 10.8% from the 2023-end level.
Long-term debt-less current maturities were $142.6 million, which declined 2% from the figure as of Dec. 31, 2023. Current maturities of long-term debt amounted to $4.1 million.
Total equity of $1.8 billion climbed nearly 16.9% from the 2023-end figure.
ENSG generated net cash from operations of $246.7 million in the first nine months of 2024, which declined 15.3% from the year-ago figure.
Capital-Deployment Update
Ensign Group did not buy back shares in the first nine months of 2024. In the same time frame, management paid dividends worth $10.2 million.
2024 Outlook Raised
Revenues are anticipated to lie within $4.25-$4.26 billion, the mid-point of which indicates an improvement of 14.1% from the 2023 figure of $3.73 billion.
Adjusted EPS is forecasted to be between $5.46 and $5.52 for 2024, the midpoint of which suggests more than 15.1% growth from the 2023 figure of $4.77.
The weighted average common shares outstanding is estimated to be around 58.5 million, and the tax rate is assumed to be 25% for 2024.
ENSG’s Zacks Rank
Ensign Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported third-quarter 2024 results so far, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) , Molina Healthcare, Inc. (MOH - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) beat the Zacks Consensus Estimate.
UnitedHealth Group reported third-quarter adjusted EPS of $7.15, which surpassed the Zacks Consensus Estimate by 1.9%. The bottom line improved 9% year over year. Revenues rose 9.1% year over year to $100.8 billion. The top line beat the consensus mark by 1.3%. Its medical care ratio was 85.2%, which deteriorated 290 bps year over year. UNH’s operating earnings grew 2.4% year over year to $8.7 billion. However, the net margin deteriorated 30 bps year over year to 6%.
Revenues from the health benefits business of UnitedHealth, UnitedHealthcare, advanced 7.2% year over year to $74.9 billion. Earnings from operations amounted to $4.2 billion, down 8.7% year over year. Revenues in the Optum business line were $63.9 billion, which rose 12.7% year over year. Optum’s earnings from operations climbed 15.4% year over year to $4.5 billion. The UnitedHealthcare business catered to 50.7 million people as of Sept. 30, 2024, which fell 4% year over year.
Molina Healthcare’s third-quarter adjusted EPS of $6.01 beat the Zacks Consensus Estimate of $5.96. The bottom line grew 19% from the year-ago period. Total revenues amounted to $10.3 billion, which improved 20.9% year over year. The top line outpaced the consensus mark by 3.8%. Premium revenues of $9.7 billion increased 18% year over year.
As of Sept. 30, 2024, total membership improved 8% year over year to around 5.6 million. Investment income rose 5.4% year over year to $118 million and beat the consensus mark of $117.1 million. The consolidated medical care, or MCR, was 89.2%. The metric rose from 88.7% a year ago. Molina Healthcare’s adjusted net income increased 18% year over year to $347 million.
Intuitive Surgical reported third-quarter adjusted EPS of $1.84, which beat the Zacks Consensus Estimate of $1.65 by 11.5%. The bottom line improved 26% year over year. The company reported revenues of $2.04 billion, up 17% from the prior-year quarter, on a reported, as well as a constant currency basis. The top line also beat the Zacks Consensus Estimate by 1.2%. Revenues from the Instruments & Accessories segment totaled $1.26 billion, indicating a year-over-year improvement of 18%.
The Systems segment’s revenues totaled $445 million, up 17.4% year over year. Intuitive Surgical shipped 341 da Vinci Surgical Systems compared with 379 in the prior-year quarter. Revenues from the Services segment amounted to $328.9 million, up 3.7% from the year-ago quarter’s level. Adjusted gross profit was $1.41 billion, up 17.3% year over year. Adjusted operating income totaled $754.9 million, up 21% year over year.