AMN Healthcare (AMN) Q3 Earnings And Revenues Top Estimates

AMN Healthcare Services Inc. (NYSE:AMN) reported third-quarter 2019 adjusted earnings per share (EPS) of 81 cents, which outpaced the Zacks Consensus Estimate of 73 cents. However, the bottom line declined 7.2% year over year.

The Zacks Rank #3 (Hold) company reported revenues worth $567.6 million, which surpassed the Zacks Consensus Estimate of $563.3 million. However, on a year-over-year basis, revenues climbed 7.7%.

Segment Details

Nurse and Allied Solutions

In the third quarter of 2019, the segment’s revenues totaled $362.5 million, up 18.4% year over year.

Locum Tenens Solutions

The segment’s revenues amounted to $84.2 million, down 16.8% from the prior-year quarter.

Other Workforce Solutions

In the quarter under review, the segment’s revenues came in at $120.9 million, up 1.2% year over year.

Margin

In the third quarter, gross profit totaled $190 million, up 8.5% year over year. As a percentage of revenues, gross margin was 33.5%, which expanded 30 basis points (bps).

Total operating expenses in the quarter were $150.3 million, up 13.4% year over year. Operating income in the quarter was $39.7 million, down 6.8%. As a percentage of revenues, operating margin was 7%, down 110 bps.

Guidance

For the fourth quarter of 2019, AMN Healthcare expects revenues within $573-$579 million. The Zacks Consensus Estimate of $585.7 million lies above the projected range.

Gross margin is expected at 33.5%, while operating margin is estimated at 8.2%.

Adjusted EBITDA is projected at 12%.

Our Take

AMN Healthcare exited the third quarter on a solid note. The company gained from its coreNurse and Allied Solutions and Other Workforce Solutions units in the quarter. Management is upbeat about the latest Advanced Medical buyout, which is expected to expand the company’s travel as well as school therapy and travel nurse staffing capabilities. Expansion in gross margin is also encouraging.

However, the company’s Locum Tenens Solutions has been witnessing lackluster performance for a couple of quarters now. In the third quarter, the company’s bottom line declined on a year-over-year basis primarily due to lower contribution from the Locum Tenens unit. Contraction in operating margin adds to the woes.

Earnings of Other MedTech Majors at a Glance

Some better-ranked companies, which posted solid results this earnings season, are Edwards Lifesciences (NYSE:EW) , Thermo Fisher Scientific Inc. (NYSE:TMO) and ResMed Inc. (NYSE:RMD) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Edwards Lifesciences delivered third-quarter 2019 adjusted EPS of $1.41, outpacing the Zacks Consensus Estimate by 15.6%. Net sales of $1.09 billion surpassed the Zacks Consensus Estimate by 5.5%.

Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, which surpassed the consensus estimate by 2.1%. Revenues of $6.27 billion outpaced the consensus estimate by 1.3%.

ResMed reported fiscal first-quarter 2020 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate of 87 cents by 6.9%. Revenues were $681.1 million, surpassing the Zacks Consensus Estimate by 3.6%.

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