Amedisys (AMED), a home health nursing company, reported earnings per share of $1.13 in the second quarter of fiscal 2010, missing the Zacks Consensus Estimate of $1.17 and $1.27 in the year-ago quarter. The company recorded an 11.8% annualized growth in revenues to reach $422.3 million. However, revenues missed the Zacks Consensus Estimate of $424 million. Growth through base/start-up agencies generated $33.6 million of revenues.
Although revenues increased 11.8%, operating income declined 5.7% to $56.1 million driven by a 15% rise in operating expenses. Operating margin during the quarter was lower by 250 basis points to 13.3%.
Home health services mean treating sick patients in their homes which saves money by avoiding costly hospitalization. Services include programs for chronic conditions and various diseases such as diabetes, coronary artery disease, congestive heart failure, and complex wound care, chronic obstructive pulmonary disease, geriatric surgical recovery, behavioral health, and stroke recovery, as well as various rehabilitative programs. Amedisys also provides hospice services to patients.
The number of home health and hospice agencies at the end of the quarter was 529 (up from 498 in the year-ago period) and 72 (51), respectively. Admissions under the home-health agency increased 8.36% to 63,076.
Amedisys and some other home healthcare providers are being currently investigated for allegedly abusing Medicare rules by the Senate Finance Committee.
Guidance
Amedisys also provided its guidance for 2010. The company expects an EPS of $4.20–$4.50 on revenues of $1.63–$1.65 billion. However, EPS guidance is way below the Zacks Consensus Estimate of $4.92. Earlier, in July 2010, Amedisys had suspended its full year guidance provided in April, which was EPS of $5.50–$5.70 on revenues of $1.70–$1.75 billion.
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