Amedisys (AMED), a home healthcare provider reported an EPS of 53 cents during the first quarter of 2011 compared to $1.29 in the year-ago period, down 58.3% year over year. However, after adjusting for certain one-time items, the EPS was 62 cents, missing the Zacks Consensus Estimate by 4 cents and 51.9% lower than the year-ago quarter.
Amedisys earns revenue through its home health and hospice agencies by providing a variety of services at homes. Revenues were $364.3 million, missing the Zacks Consensus Estimate of $384 million and 11.8% lower than the year-ago quarter.
In addition to the declining revenue, the fall in EPS was also resulted from increase in the weighted average number of diluted shares outstanding to approximately 28.9 million compared to 28.4 million in 2010.
The fall in net service revenue reflects the $40.5 million drop in same store agencies sales, $16.2 million decline related to the agencies shut down offset by an $8.0 million pickup in sales related to start-up and acquisition agencies.
Gross margin was down 300 basis points to 47.5% in the first quarter 2011. Operating expenses (excluding depreciation and amortization and provision for doubtful accounts) witnessed a 4.2% year-over-year decline to $324.3 million.
Adjusted operating income drastically reduced to $39.9 million, a huge 40.2% dip driven by a 17.1% fall in gross profit and rise in operating expenses. This in turn led to a massive decline of 710 bps to 13.43% in operating margin.
Amedisys exited the reported quarter with cash and cash equivalents of $148.8 million, up 23.6% year over year.
The disappointing result of Amedisys was primarily due to soft admissions volume. However, the company is making aggressive efforts to increase operational efficiencies at minimum costs.
In addition, the company is also opting for planned acquisitions. Recently in April, the company has inked a deal to acquire Beacon Hospice, a Boston-based hospice company for $125 million.
Home health services provide treatment to sick patients at their homes that helps save money by avoiding costly hospitalization. Services include programs for chronic conditions and various diseases such as diabetes, coronary artery disease, congestive heart failure, and complex wound care, chronic obstructive pulmonary disease, geriatric surgical recovery, behavioral health, and stroke recovery, as well as various rehabilitative programs. Amedisys also provides hospice services to patients.
Guidance
Amedisys reaffirmed its guidance for 2011. The company expects an EPS of $3.00–$3.30 keeping in line with the Zacks Consensus Estimate of $3.15. It expects revenues to be in the range of $1.60–$1.65 billion, in line with the Zacks Consensus Estimate of $1.62 billion.
AMEDISYS INC (AMED): Free Stock Analysis Report
Zacks Investment Research
