Encompass Health Q4 Earnings Beat on Strong Discharge Growth

Encompass Health Corporation EHC reported fourth-quarter adjusted earnings per share (EPS) of $1.17, which beat the Zacks Consensus Estimate by 14.7%. The bottom line increased 23.2% year over year.See the Zacks Earnings Calendar to stay ahead of market-making news.Net operating revenues of $1.4 billion improved 12.8% year over year. The top line beat the consensus mark by 2.1%.Strong quarterly results benefited from higher inpatient and outpatient revenues. Strong discharges, higher net revenue per discharge, and impressive growth-related initiatives supported top-line growth. However, a rise in operating expenses, particularly in salaries and benefits, partially offset this. Shares of the company have remained stable since the earnings release.Encompass Health Corporation Price, Consensus and EPS Surprise Encompass Health Corporation price-consensus-eps-surprise-chart | Encompass Health Corporation QuoteQ4 OperationsEHC’s net patient revenue per discharge rose 4.2% year over year and beat the Zacks Consensus Estimate by 1.6%. Total discharges grew 7.8% year over year to 63,839, higher than the consensus estimate of 63,313.1.Total operating expenses of $1.17 billion escalated 11% year over year due to elevated salaries, benefits, and other operating expenses. This was higher than our estimate of $1.16 billion. Net and comprehensive income climbed 37.9% year over year to $164.2 million in the fourth quarter. Adjusted EBITDA of $289.6 million grew 13.6% year over year and surpassed our estimate of $261 million.  In the fourth quarter, Encompass Health added 22 beds to its existing hospitals and inaugurated one de novo hospital.Financial Update (as of Dec. 31, 2024)Encompass Health exited the fourth quarter with cash and cash equivalents of $85.4 million, which rose 23.6% from the 2023-end level. Total assets of $6.5 billion increased 7.1% from the figure at 2023-end. Long-term debt, net of the current portion, amounted to $2.4 billion, which declined 12.2% from the figure as of Dec. 31, 2023. The current portion of long-term debt totaled $138.6 million.Total shareholders’ equity of $2.8 billion improved 23.8% from the 2023-end figure.EHC generated $1 billion of net cash from operations in 2024, which improved 17.9% from the prior-year comparable period. Adjusted free cash flow rose more than two-fold year over year to $690.3 million.Full Year UpdateEncompass Health’s 2024 operating revenues of $5.4 billion increased from $4.8 billion a year ago. Full-year adjusted net income of $4.43 per share rose from $3.64 a year ago.Capital Deployment UpdateEncompass Health bought back shares worth $31.1 million in 2024. As of Dec. 31, 2024, the company had a leftover capacity of around $489 million under its buyback authorization.Management paid out a quarterly cash dividend of 17 cents per share.2025 OutlookNet operating revenues are currently anticipated to be between $5.8 billion and $5.9 billion. The midpoint indicates an improvement of 8.9% from the 2024 reported figure.Adjusted EBITDA is anticipated to be between $1.16 and $1.2 billion. The midpoint of the updated guidance indicates 6.9% growth from the 2024 figure. Adjusted EPS from continuing operations is expected to be between $4.67 and $4.96. The midpoint of the outlook implies an 8.7% rise from the 2024 figure. Adjusted free cash flow is estimated to be between $590 million and $690 million. Maintenance capex is anticipated to be in the range of $215-$225 million.The company expects to open seven de novo hospitals, each adding 340 beds, and a 50-bed satellite hospital. In 2025, it also expects to add around 100 beds to existing hospitals.Growth Targets ReaffirmedOver the 2023-2027 period, management aims to inaugurate six to 10 de novos each year, as well as make bed additions in the range of 80-120 each year. It also expects a CAGR of 6-8% in discharges in the same time frame.Zacks RankEncompass Health currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Other Medical Sector ReleasesOf the Medical sector players that have reported fourth-quarter 2024 results so far, the bottom-line results of Centene Corporation CNC, HCA Healthcare, Inc. HCA and Elevance Health, Inc. ELV beat the respective Zacks Consensus Estimate.Centene reported fourth-quarter 2024 adjusted EPS of 80 cents, which outpaced the Zacks Consensus Estimate by 63.3%. Moreover, the bottom line rose 77.8% year over year. Revenues were $40.8 billion, which increased 3.4% year over year. The top line surpassed the consensus mark by 4.8%. Revenues from Medicaid dipped 1% year over year to $20.8 billion, while Medicare revenues grew 4% year over year to $5.5 billion. Additionally, commercial revenues of $8.7 billion climbed 18% year over year.Centene's premiums amounted to $35.5 billion, rising 3.8% year over year. Service revenues decreased 29.7% year over year to $777 million. As of Dec. 31, 2024, total membership was 28.6 million, which grew 4.1% year over year. Centene’s HBR deteriorated 10 basis points year over year to 89.6%. Adjusted net earnings of $404 million rose 68.3% year over year.  Adjusted SG&A expense ratio of 8.9% improved 80 basis points year over year. HCA Healthcare’s fourth-quarter 2024 adjusted EPS of $6.22 outpaced the Zacks Consensus Estimate by 4.2%. The bottom line advanced 5.4% year over year. Revenues rose 5.7% year over year to $18.3 billion. The top line beat the consensus mark by 1.1% Same-facility equivalent admissions improved 3.1% year over year in the fourth quarter while same-facility admissions advanced 3% year over year. Same-facility revenue per equivalent admission grew 2.9% year over year.  Same-facility inpatient surgeries increased 2.8% year over year. Same-facility outpatient surgeries dipped 1.3% year over year. Additionally, same-facility emergency room visits rose 2.4% year over year in the fourth quarter.  Adjusted EBITDA of $3.7 billion improved 2.6% year over year. HCA Healthcare operated 190 hospitals and roughly 2,400 ambulatory sites of care across 20 states and the United Kingdom as of Dec. 31, 2024.Elevance Health reported fourth-quarter 2024 adjusted EPS of $3.84, which surpassed the Zacks Consensus Estimate by 1.1%. However, the bottom line deteriorated 31.7% year over year. Operating revenues of $45 billion rose 6% year over year. Moreover, the top line beat the consensus mark by a whisker. Medical membership of Elevance Health was around 45.7 million as of Dec. 31, 2024, which slipped 2% year over year. Premiums increased 3.2% year over year to $36.2 billion. Product revenues of $6.7 billion increased 24.5% year over year. In the Health Benefits segment, operating revenues totaled $37.6 billion, which increased 3% year over year. Operating gain declined 75% year over year to $0.2 billion. The Carelon segment’s operating revenues amounted to $14.7 billion, which rose 19% year over year. The unit’s operating gain of $0.6 billion remained stable year over yearOnly $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HCA Healthcare, Inc. (HCA): Free Stock Analysis Report Centene Corporation (CNC): Free Stock Analysis Report Encompass Health Corporation (EHC): Free Stock Analysis Report Elevance Health, Inc. (ELV): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks