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Envision Healthcare: Pager Tie-Up & Q3 Earnings in Focus

Envision Healthcare Holdings Inc's EVHC division Evolution Health is partnering with on-demand healthcare service provider company, Pager. The collaboration combines Evolution Health's physician-led, team-based model of care with Pager's patient-focused technology.

Evolution Health along with other divisions of Envision - EmCare and American Medical Response (AMR) - has access to over 31,000 hospital-based physicians, community-based paramedics, nurses, advanced practice providers and other clinicians.

The partnership will allow Evolution to address the immediate needs of patients by scheduling a medical visit or tele-consult with the physician within one hour of placing the initial call through Pager. The service ensures wide-ranging planned and unplanned care to patients across various care settings.

Beginning Nov 1, 2015, Pager and Evolution Health will provide the service in San Francisco and New York.

Meanwhile, Envision is going through a rough phase with its third-quarter 2015 results failing to impress. Earnings of 30 cents per share not only declined 14.3% on a year-over-year basis but also missed the Zacks Consensus Estimate by 9 cents.

Envision Healthcare Holdings Inc. - Earnings Surprise | FindTheBest

Revenues jumped almost 19% year over year to $1.37 billion but lagged the Zacks Consensus Estimate of $1.42 billion. However, adjusted EBITDA declined 7.3% from the year-ago quarter to $142.5 million.

Segment Details

EmCare revenues surged 24.8% to almost $933.9 million. Revenues from acquisitions completed over the last 12 months contributed growth of 16.1%. Net new contracts grew 6.9%, while same-store contributed 1.8% to overall revenues. Same-store revenues increased 2.1% driven by 2.6% growth in patient volume and partially hurt by a 0.5% decline in rate, primarily due to loss of Medicaid parity.

EmCare EBITDA plunged 14.4% to $86.4 million, primarily because of lower same-store revenue growth and higher cost of services. Increased contract losses and insurance reserves also weighed on EBITDA.

American Medical Response (AMR) revenues increased 7.8% to $433.4 million. Same-market revenue growth was 2.9%, driven by a 3.7% increase in volume, partially offset by a rate decline of 0.8%. Net new contract revenue growth was 3.3%, while acquisition-related growth stood at 1.6%.

AMR EBITDA increased 6.2% to $56.1 million in the reported quarter.

Share Repurchase Program

Envision's board of directors recently authorized a share repurchase program worth $500 million. The program will be funded through operating cash flow and new borrowings. At the end of the first nine months of 2015, the company generated operating cash flow of almost $195 million, while free cash flow was $168.1 million.

Guidance

Envision forecasts adjusted EBITDA of $600-$605 million for full-year 2015. Adjusted earnings are projected in the range of $1.28 to $1.30 per share.

Zacks Rank & Key Picks

Envision carries a Zacks Rank #5 (Strong Sell).

Better-ranked stocks in the same space include AMN Healthcare AHS , Healthways HWAY and ICON plc ICLR . All the three stocks carry a Zacks Rank #2 (Buy).

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HEALTHWAYS INC (HWAY): Free Stock Analysis Report

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ENVISION HLTHCR (EVHC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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