Yahoo Finance Encompass Health Corp (EHC) Surpasses First Quarter Revenue Forecasts and Raises Full-Year Guidance
Reported Q1 2024 net operating revenue: $1,316.0 million, up 13.4% year-over-year, surpassing estimates of $1,272.86 million.
Income from continuing operations per diluted share: $1.11, significantly exceeding the estimated earnings per share of $0.94.
Adjusted earnings per share: $1.12, also exceeding the quarterly EPS estimate of $0.94.
Adjusted EBITDA: $273.0 million, marking a 19.2% increase from the previous year.
Adjusted free cash flow: $167.6 million, reflecting a 5.6% increase from the prior year.
Discharge growth: Reported a 10.0% increase in discharges and a 6.7% increase in same-store discharges.
Net patient revenue per discharge: Rose by 2.8% to $20,990.
On April 24, 2024, Encompass Health Corp (NYSE:EHC), a leading provider of post-acute healthcare services in the United States, disclosed its financial results for the first quarter ended March 31, 2024. The company announced a notable increase in net operating revenue and income, significantly exceeding analyst expectations. The detailed financial outcomes were released in their 8-K filing.
Encompass Health reported a net operating revenue of $1,316.0 million for Q1 2024, up 13.4% from $1,160.4 million in Q1 2023, surpassing the estimated revenue of $1,272.86 million. This growth was primarily driven by a 10.0% increase in discharges, including a 6.7% rise in same-store discharge growth. The net patient revenue per discharge also saw a 2.8% increase to $20,990.
The company's income from continuing operations attributable to Encompass Health per diluted share rose to $1.11, up from $0.88 in the previous year, and adjusted earnings per share improved to $1.12 from $0.88. These figures notably outperformed the estimated earnings per share of $0.94. Cash flows from operating activities increased by 4.8% to $238.8 million, primarily due to an uptick in net income, although partially offset by changes in working capital.
Financial Highlights and Strategic Achievements
Adjusted EBITDA for the quarter reached $273.0 million, marking a 19.2% increase from the prior year, driven by enhanced revenue and stringent expense management. Adjusted free cash flow also grew by 5.6% to $167.6 million. Reflecting on the quarter's achievements, Mark Tarr, President and CEO of Encompass Health, stated,
We are pleased with our first quarter performance. Revenue growth of 13.4% driven primarily by strong discharge growth combined with prudent expense management to drive Adjusted EBITDA growth of 19.2%. Our value proposition and operating strategy continue to be validated and we remain highly optimistic about the long-term prospects of our business."
In response to the strong quarterly performance, Encompass Health has revised its full-year 2024 guidance upwards. The company now expects net operating revenue to be between $5,250 million and $5,325 million, up from the previous range of $5,200 million to $5,300 million. Adjusted EBITDA is forecasted to be between $1,030 million and $1,065 million, and adjusted earnings per share from continuing operations are anticipated to be in the range of $3.86 to $4.11.
Operational Insights and Industry Position
Encompass Health operates the largest network of inpatient rehabilitation hospitals in the U.S., with 160 hospitals across 37 states and Puerto Rico. The company specializes in providing advanced rehabilitative care to patients recovering from major injuries or illnesses. Its focus on high-quality, compassionate care has positioned it as a leader in the healthcare sector, recognized by Fortune's Worlds Most Admired Companies and Modern Healthcares Best Places to Work in Healthcare.
The company's robust performance in Q1 2024 underscores its effective operational strategies and its ability to adapt to dynamic market conditions. The increased guidance reflects management's confidence in sustaining growth and profitability, leveraging strong discharge rates and efficient cost control measures.
For more detailed information, investors and interested parties are encouraged to refer to the supplemental materials and the upcoming earnings call scheduled for April 25, 2024, details of which can be found on Encompass Health's investor relations website.
As Encompass Health continues to navigate through a complex healthcare landscape, its strategic initiatives and operational excellence are expected to drive sustained growth and shareholder value in the upcoming periods.
Explore the complete 8-K earnings release (here) from Encompass Health Corp for further details.
This article first appeared on GuruFocus.
