Yahoo Finance AMN Healthcare (AMN) Q1 Earnings and Revenues Beat Estimates
AMN Healthcare Services, Inc. AMN delivered adjusted earnings per share (EPS) of $2.49 in the first quarter of 2023, which declined 28.7% year over year. However, the figure surpassed the Zacks Consensus Estimate by 5.5%.
Our projection of adjusted EPS was $2.35.
GAAP EPS for the quarter was $2.02, reflecting a 34.6% plunge from the year-earlier figure.
Revenues in Detail
AMN Healthcare registered revenues of $1.13 billion in the first quarter, down 27.5% year over year. However, the figure surpassed the Zacks Consensus Estimate by 1.6%.
The first-quarter revenue compares to our estimate of $1.10 billion.
Segment Details
AMN Healthcare conducts its business via three reportable segments — Nurse and Allied Solutions, Physician and Leadership Solutions and Technology and Workforce Solutions.
In the first quarter of 2023, the Nurse and Allied Solutions segment’s revenues totaled $824.5 million, down 32.9% year over year. Travel nurse staffing revenues were down 39% year over year, whereas Allied revenues declined by 8% year over year.
This figure compares to our Nurse and Allied Solutions segment’s first-quarter projection of $816.3 million.
The Physician and Leadership Solutions segment’s revenues totaled $165.8 million, down 7.7% year over year. This primarily resulted from a 5% decline in locum tenens revenues, which amounted to $107 million. Interim leadership revenues were down 9% year over year. Physician and leadership search businesses saw revenue decline by 16% year over year.
This figure compares to our Physician and Leadership Solutions segment’s first-quarter projection of $158.2 million.
The Technology and Workforce Solutions segment’s revenues totaled $135.9 million, down 6.2% year over year. Language interpretation services business revenues came in at $62 million in the quarter (up 25% year over year), while the vendor management systems (VMS) business saw a 28% year-over-year revenue decline to reach $54 million.
This figure compares to our Technology and Workforce Solutions segment’s first-quarter projection of $127.6 million.
AMN Healthcare Services, Inc. Price, Consensus and EPS Surprise
AMN Healthcare Services, Inc. price-consensus-eps-surprise-chart | AMN Healthcare Services, Inc. Quote
Margin Trend
In the quarter under review, AMN Healthcare’s gross profit fell 25.7% to $368.8 million. However, the gross margin expanded 79 basis points (bps) to 32.8%.
We had projected 32.9% of gross margin for the first quarter.
Selling, general & administrative expenses fell 20.2% to $205.6 million.
Adjusted operating profit totaled $163.2 million, reflecting a 31.6% decline from the prior-year quarter. The adjusted operating margin in the first quarter contracted 87 bps to 14.5%.
Financial Position
AMN Healthcare exited first-quarter 2023 with cash and cash equivalents of $28.5 million compared with $64.5 million at the end of 2022. Total debt at the end of first-quarter 2023 was $990 million compared with $850 million at the end of 2022.
Net cash flow provided by operating activities at the end of first-quarter 2023 was $43.4 million compared with $200.2 million a year ago.
Guidance
AMN Healthcare has provided its financial outlook for the second quarter of 2023.
For the second quarter, the company expects revenues to be $970 million-$1.000 billion, reflecting a decline of 30-32% compared with the prior-year figure. The Zacks Consensus Estimate for the same stands at $977.7 million.
With respect to the Nurse and Allied Solutions segment, the company expects revenues to decline 36-38% from the prior-year figure. The Technology and Workforce Solutions segment’s revenues are expected to decline 15% from the prior-year figure.
The company projects second-quarter revenues at the Physician and Leadership Solutions segment to decline 5% from the prior-year figure.
Our Take
AMN Healthcare exited the first quarter of 2023 with better-than-expected results. Management confirmed that the company will be rolling out major enhancements to key parts of its technology. This includes ShiftWise VMS and AMN Passport, its client and clinician engagement platforms. This is expected to strengthen AMN Healthcare’s value proposition to health organizations and health professionals. Management also confirmed that the company is currently investing in initiatives that will likely make its services more tech-enabled and integrated. These look promising for the stock.
Per management, the Technology and Workforce Solutions and Physician and Leadership Solutions segments exceeded expectations. The continued strength in AMN Healthcare’s Language Services also looks promising. The expansion of the gross margin bodes well for the stock.
However, AMN Healthcare’s dismal top line and bottom-line performances were disappointing. The decline in all the segmental revenues during the reported quarter was worrying. The contraction of the adjusted operating margin raises our apprehension about the stock.
AMN Healthcare expects to register a decline in its overall top line and all its segments in the second quarter of 2023, which is concerning. The company’s reliance on third parties and operation in a stiff competitive space are other headwinds.
Zacks Rank and Key Picks
AMN Healthcare currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are AmerisourceBergen Corporation ABC, Intuitive Surgical, Inc. ISRG and Cardinal Health, Inc. CAH.
AmerisourceBergen, carrying a Zacks Rank #2 (Buy), reported second-quarter fiscal 2023 adjusted EPS of $3.50, beating the Zacks Consensus Estimate by 6.4%. Revenues of $ $63.46 billion outpaced the consensus mark by 4.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AmerisourceBergen has a long-term estimated growth rate of 8.7%. ABC’s earnings surpassed estimates in all the trailing four quarters, the average being 3.1%.
Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.
Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 1.9%.
Cardinal Health reported third-quarter fiscal 2023 adjusted EPS of $1.74, beating the Zacks Consensus Estimate by 17.6%. Revenues of $50.49 billion surpassed the Zacks Consensus Estimate by 1.7%. It currently carries a Zacks Rank #2.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 12.3%.
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