Tennessee-based healthcare provider
) reported adjusted earnings per share (EPS) of 63 cents from
continuing operations, reflecting an 8.6% rise from the year-ago
figure of 58 cents.
However, the adjusted EPS figure missed the Zacks Consensus
Estimate by a penny although it was within the company's
second-quarter guidance range of 61−64 cents. Solid revenue growth
in the second quarter primarily contributed to the year-over-year
Including one-time items, the company's reported second-quarter
2014 net earnings per share from continuing operations was 59
cents, up 1.7% year over year.
Following the earnings release, the company's share price
dropped 0.8% to close at $47.36 on Friday.
Amsurg Corp - Earnings Surprise |
Quarter in Details
Revenues in the quarter scaled up 5.2% year over year to $281.1
million, but fell short of the Zacks Consensus Estimate of $283.0
million. According to Amsurg, the top-line growth came largely on
the back of average revenues per procedure, which increased 4% on a
comparable-quarter basis on the back of modified procedure mix.
Same-center revenues rose 1% year over year, despite having one
less business day in the quarter compared with the same period last
year. AmSurg exited the second quarter with a total of 243
Operating expenses increased 7.2% year over year to $186.5
million due to higher salaries and benefits (up 4.7% to $84.9
million), supply cost (up 5.9% to $41.3 million) and other
operating expenses (up 11.9% to $60.3 million). Moreover, on the
back of increased expenses, adjusted operating margin contracted 80
basis points to 34.3% in the quarter.
AmSurg exited the reported quarter with $44.9 million in cash
and cash equivalents versus $50.8 million at the end of 2013, and
had $300 million available borrowing capacity under its revolving
credit facility. For the second quarter, net cash flow from
operating activities was $83.8 million, up 6.5% from the year-ago
AmSurg has updated its 2014 operating and financial guidance,
primarily to take into account the impact of the Sheridan
transaction. The company now expects revenues in the range of
$1.61−$1.63 billion (earlier guidance: $1.12−$1.13 billion). The
current Zacks Consensus Estimate of $1.64 billion exceeds the
guidance range. AmSurg also upgraded its full-year adjusted EPS
outlook to $2.61−$2.66 (earlier $2.41−$2.45). The current Zacks
Consensus Estimate of $2.64 lies within the company-guided
Further, the company's 2014 same-center revenue growth is
projected at 1%-2% (unchanged). Moreover, the company now expects
6%-8% organic revenue growth in physician services in 2014.
Expected net cash flow from operating activities, less distribution
to non-controlling interests, has been upgraded to the range of
$170-$180 million (earlier: $150−$160 million).
Additionally, AmSurg provided its EPS guidance for the third
quarter of 2014. The company expects EPS in the range of 63−65
cents. The current Zacks Consensus Estimate of 62 cents for the
third-quarter earnings falls below the guided range.
Yet again, AmSurg delivered disappointing second-quarter 2014
results missing the Zacks Consensus Estimate on both fronts.
However, we are positive on the company's new joint ventures and
expect it to progress well on its acquisition pipeline, supported
by a strong cash position. Moreover, the company has upgraded its
2014 outlook which indicates some near-term catalyst that will aid
its financials further in the near future.
Moreover, we are optimistic about the fact that government
agencies have undertaken initiatives to curtail healthcare
expenditure, thereby resulting in a shift toward ambulatory surgery
centers from admission to traditional hospitals. This in turn
should benefit healthcare providers like Amsurg.
Currently, AmSurg retains a Zacks Rank #2 (Buy). Some other
well-placed Medical-Outpatient/Home Care stocks include Amedisys
), Chemed Corp. (
) and HEALTHSOUTH Corp. (
). All these stocks hold a Zacks Rank #1 (Strong Buy).
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