MEDNAX's (MD) Earnings Beat Estimates in Q2, Decrease Y/Y

MEDNAX, Inc. MD delivered second-quarter 2019 adjusted earnings of 80 cents per share, beating the Zacks Consensus Estimate by 2.6%. However, the bottom line declined 19.2% year over year due to lower revenue stream.

Quarterly Details

The company generated revenues of $868 million, in line with the Zacks Consensus Estimate. Although the top line fell 5.2% from the year-ago period, mainly due to non-renewal of certain contracts, the same unit revenues inched up 1.1% year over year owing to volume expansion.

However, this upside was offset by the decrease in maternal-fetal medicine services.

General and administrative expenses were down 2.6% to $103.5 million.
Interest expense of the company escalated 43.8% to $31 million, primarily due to higher effective interest rate on the borrowings between two periods.
In the quarter under review, EBITDA totaled $131 million, down by nearly 9.8%.

Mednax, Inc Price, Consensus and EPS Surprise

Mednax, Inc Price, Consensus and EPS Surprise

Mednax, Inc price-consensus-eps-surprise-chart | Mednax, Inc Quote

Financial Update

As of Jun 30, 2019, the company had cash, cash equivalents and restricted cash of about $40.2 million, down 11.5% from the level at 2018 end.

The company incurred total debt of $2 billion, up 5.4% from 2018-end level and total assets of $5.6 billion, down 5.7% from the level at 2018 end.
Cash flows from operating activities were $115.3 million, down 12.7% year over year.

Share Repurchase Update

The company bought back shares worth $65.5 million in the second quarter of 2019.

Business Update

The company reported an incremental non-cash impairment charge of $50 million, net of the related income tax benefit, in the second quarter. This was to reduce the MedData net assets.

Third-Quarter Outlook

For the third quarter of 2019, the company expects adjusted EPS to be in the band of 88-96cents.

This company assumes that total same-unit revenue growth for the three months ended Sep 30, 2019 to be in the 1-3% range, from the prior-year period.

Mednax expects its Adjusted EBITDA to be between $130 million and $140 million.

2019 Guidance

Following second-quarter results, the company estimates adjusted EBITDA to be at lower end of its previous projection ($505-$535 million) or $505 million at the mid-point.

Zacks Rank

MEDNAX carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Releases From the Medical Sector

Among other players from the medical sector having reported second-quarter earnings so far, the bottom-line results of UnitedHealth Group Incorporated UNH, Anthem Inc. ANTM and Centene Corporation CNC outpaced the respective Zacks Consensus Estimate.

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