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The Ensign Group Lags Q4 Earnings, Revenues; View Intact

The Ensign Group, Inc.ENSG reported adjusted earnings of 35 cents per share in the fourth quarter of 2015, which missed the Zacks Consensus Estimate by a penny. However, adjusted earnings increased 29.6% on a year-over-year basis.

The upside was primarily due to an impressive jump in revenues, which surged almost 34% to $365.1 million. However, revenues missed the Zacks Consensus Estimate of $367 million.

Total Transitional, Skilled and Assisted living (TSA) service revenues increased 32.8% to $336.9 million. Skilled mix by nursing days improved 310 basis points (bps) to 30.9% in the quarter under review. Skilled mix by nursing revenue also increased 140 bps to 51.8%. Occupancy percentage- Operational beds, however, fell 100 bps to 77.2%.

Same facility TSA revenues improved 7.5% to $230.5 million, while that from the transitional facility increased 6.9% to $20.6 million. TSA services revenues from recently acquired facilities amounted to $85.8 million.

Total home health and hospice revenues surged 66.9% to $26.8 million. While home health services revenue improved 56.3% to $13.5 million, the same from hospice services surged 79.3% to $13.3 million. In the quarter under review, The Ensign Group acquired seven skilled nursing facilities and opened three healthcare resorts.

During the fourth quarter, the company paid a dividend of 4 cents per share, which reflects an increase of 6.7% on a year-over-year basis. Notably, this is the thirteenth consecutive year of a dividend increase by management. On Feb 5, management increased its revolving credit facility by $100 million to $250 million, out of which $111.8 million was drawn on Feb 5.

Guidance

The Ensign Group reaffirmed its projections for 2016. The company expects revenues in the range of $1.53-1.58 billion. Earnings are forecasted at $1.43-$1.50 per share.

Zacks Rank and Other Key Picks

Currently, The Ensign Group has a Zacks Rank #2 (Buy). Other well-placed stocks in the medical sector are Abiomed ABMD , Exactech EXAC and Luminex LMNX . All the stocks sport a Zacks Rank #1 (Strong Buy).

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LUMINEX CORP (LMNX): Free Stock Analysis Report

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ENSIGN GROUP (ENSG): 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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