Amedisys Inc. AMED reported adjusted earnings from continuing operations of 44 cents per share in the fourth quarter of 2016, up 10% year over year. Earnings also surpassed the Zacks Consensus Estimate by the same magnitude.
Excluding adjustments, the company's reported earnings of 26 cents a share were down 31.6% from the year-ago quarter.
Full-year adjusted EPS (earnings per share) came in at $1.55, up 4.7% from the year-ago period.
Amedisys primarily derives revenues from its home health and hospice agencies. Fourth-quarter net service revenues grossed $366.3 million, up 8.2% year over year. The top line however, remained below the Zacks Consensus Estimate of $370 million.
Full-year 2016 revenues were $1,437.4 million, up 12.3% from 2015.
Amedisys Inc Price, Consensus and EPS Surprise
Amedisys Inc Price, Consensus and EPS Surprise | Amedisys Inc Quote
Quarter in Detail
Within the company's Home Health division, net service revenues totaled $268.3 million (up 2.2%) in the fourth quarter. Medicare revenues of $203.2 million improved 7.1% year over year while non-Medicare revenues declined 2.7% to $65.1 million.
Within the Hospice division, net service revenues grossed $85.2 million (up 12.4% year over year), including Medicare revenues of $80.7 million (up 13.8%) and non-Medicare revenues of $4.5 million (down 8.2%).
The company’s gross margin contracted 115 basis points (bps) to 41.9% in the fourth quarter while gross profit rose 5.3%. Expense on salaries and benefits increased 10% to $77.0 million. Other expenses, however, dropped 2.9% to $45.1 million. Adjusted operating income of $77.8 million in the reported quarter reflects an increase of 2% from the year-ago adjusted operating income of $76.3 million. Operating margin contracted 130 bps to 21.2% from the year-ago figure.
Amedisys exited the year with cash and cash equivalents of $30.2 million compared with $27.5 million at the end of the preceding year. The company's long-term obligations (excluding current portion) were $87.8 million at the end of 2016, down from $91.6 million at the end of 2015. Full-year net operating cash flow was $62.3 million compared with $107.8 million in the year-ago period.
Our Take
Amedisys ended the fourth quarter with earnings ahead of the Zacks Consensus Estimate but revenues missing the mark. In the Home Health division, the company witnessed strong organic growth in Medicare and non-Medicare revenues. Amedisys is currently focused on three priorities – clinical distinction, driving organic and inorganic growth, realizing operational efficiencies and becoming an employer of choice.