Pediatrix's (MD) Q4 Earnings Miss Due to Soft Patient Volumes

Pediatrix Medical Group, Inc. MD reported a fourth-quarter 2023 adjusted earnings per share (EPS) of 32 cents, which matched the Zacks Consensus Estimate.  The bottom line plunged 31.9% year over year.

Net revenues of $496.4 million slipped 3.4% year over year due to the impact of non-same-unit activity and lower same-unit revenues. The top line missed the consensus mark by 4.9%.

The quarterly results suffered a blow due to a decline in patient volumes, an elevated expense level and the adverse impact of an aggregate non-cash impairment loss related to goodwill and other assets. Nevertheless, the downside was partly offset by a favorable payor mix.

Pediatrix Medical Group, Inc. Price, Consensus and EPS Surprise


Pediatrix Medical Group, Inc. Price, Consensus and EPS Surprise

Pediatrix Medical Group, Inc. price-consensus-eps-surprise-chart | Pediatrix Medical Group, Inc. Quote


Q4 Update

Overall same-unit revenues fell 1.5% year over year in the fourth quarter. Same-unit revenues attributable to patient volume decreased 1% year over year.

Same-unit revenues from net reimbursement-related factors dipped 0.5% year over year due to the effect of the financial support received from Pediatrix’s revenue cycle management vendor in the year-ago quarter. Nevertheless, the downside was partly offset by moderate growth in hospital contract administrative fees and payor mix.

Total operating expenses of MD escalated 27.2% year over year to $607.9 million in the quarter under review, higher than our estimate of $480.4 million. The year-over-year increase was due to a rise in practice supplies and other operating expenses, general and administrative expenses, and the recording of a goodwill impairment cost.

General and administrative expenses rose 3.9% year over year to $53.1 million but was lower than our estimate of $57.8 million.

Interest expenses increased 1.3% year over year to $10.1 million due to increased interest rates on the company’s adjustable-rate borrowings, which beat our estimate of $9.9 million.

Adjusted EBITDA of $50.8 million tumbled 23.6% year over year and lagged our estimate of $52 million.

Financial Update (as of Dec 31, 2023)

Pediatrix exited the fourth quarter with cash and cash equivalents of $73.3 million, which increased more than seven-fold from the 2022 end figure.

Total assets of $2.2 billion dropped 5.5% from the figure at 2022 end.

Total debt, net, amounted to $633.3 million, down 2.8% from the figure as of Dec 31, 2022.

Total shareholders’ equity of $849.1 million declined 4.8% from the level at 2022 end.

2024 View Unveiled

Management anticipates adjusted EBITDA to lie between $200 million and $220 million, the mid-point of which indicates a 4.8% improvement from the 2023 figure of $200.4 million.

Interest expense is projected within $39.9-$40.6 million for 2024, the mid-point of which suggests a 4.4% fall from the 2023 figure of $42.1 million.  

Depreciation and amortization expenses are estimated at $39 million. Transformation and restructuring related expenses are anticipated at $25 million. Income tax expense is forecasted to stay within $26.65-$32.40 million.

Income from continuing operations attributable to MD is expected to lie between $68.75 million and $83.70 million in 2024.

Zacks Rank

Pediatrix currently has a Zacks Rank #4 (Sell). 

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

Other Medical Sector Releases

Of the Medical sector players that have reported fourth-quarter 2023 results so far, the bottom-line results of Integer Holdings Corporation ITGR, Amgen Inc. AMGN and Molina Healthcare, Inc. MOH beat the respective Zacks Consensus Estimate.

Integer Holdings delivered adjusted EPS of $1.39 in the fourth quarter of 2023, which improved 25.2% year over year. The figure topped the Zacks Consensus Estimate by 3.7%. It registered revenues of $413.2 million in the fourth quarter, up 10.9% year over year. The figure surpassed the consensus estimate by 0.3%. Organically, revenues increased 9.5%.

The Medical Sales segment reported revenues of $404.1 million, up 13.3% year over year on a reported basis and 11.9% on an organic basis. Revenues in the Non-Medical segment totaled $9.1 million, down 41.9% year over year both on a reported and organic basis. ITGR’s operating income totaled $43.5 million, reflecting an 18% uptick from the year-ago quarter. Operating margin in the fourth quarter expanded 60 bps to 10.5%.

Amgen’s fourth-quarter 2023 adjusted earnings of $4.71 per share beat the Zacks Consensus Estimate of $4.66. Earnings rose 15% year over year. Total revenues of $8.2 billion marginally beat the consensus estimate of $8.16 billion. Total revenues rose 20% year over year. Total product revenues increased 20% from the year-ago quarter to $7.83 billion (U.S.: $5.87 billion; ex-U.S.: $1.969 billion). Prolia revenues were $1.1 billion, up 12% from the year-ago quarter.

Evenity recorded sales of $318 million in the quarter, up 41% year over year. Xgeva delivered revenues of $527 million, up 9% year over year, driven by higher net selling prices. Adjusted operating margin of AMGN rose 0.8 percentage points to 46.7% in the quarter

Molina Healthcare reported fourth-quarter 2023 adjusted EPS of $4.38, which outpaced the Zacks Consensus Estimate by 1.6%. The bottom line advanced 6.8% year over year. Total revenues rose 10% year over year to $9 billion in the quarter under review. Also, the top line surpassed the consensus mark by 9%.

Premium revenues amounted to $8.4 billion, which grew 5.6% year over year in the fourth quarter. Investment income of $114 million rose nearly one-fold year over year. MOH reported an adjusted net income of $255 million, which advanced 6.3% year over year. The consolidated medical care ratio deteriorated 80 bps year over year to 89.1%. Total membership was around 5 million as of Dec 31, 2023, which declined 5% year over year.

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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.

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