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Envision Healthcare (EVHC) Q2 Earnings Beat, Revenues Miss

Zacks

Envision Healthcare Corporation EVHC reported second-quarter 2017 adjusted earnings of 79 cents per share beating the Zacks Consensus Estimate of 75 cents. The company is a leading provider of physician-led outsourced medical services to consumers, hospitals and healthcare systems.

The company reported adjusted revenues of approximately $1.95 billion, which lagged the Zacks Consensus Estimate of $1.96 billion. However, the figure surpassed the year-ago quarterly revenues of $758.5 million.

Segment Details

Physician Services: Net revenues for Physician Services were $1.63 billion in the second quarter, increasing 9.3% from $1.49 billion in the prior-year period. The upside was driven by contributions from acquisitions and new contracts.


Ambulatory Services: Net revenues in the reported quarter were $318.5 million versus $319.8 million in the prior-year quarter. Ambulatory Services operated 263 ambulatory surgery centers and one surgical hospital as of Jun 30.

Financial Details

As of Jun 30, Envision Healthcare had cash and cash equivalents of $441.3 million versus $316.9 million as of Dec 31, 2016. Net cash flows from operations were $236.6 million during the second quarter of 2017.

Guidance Revised

Envision Healthcare revised its 2017 guidance to reflect lower emergency medicine volumes and their impact on financial performance. The company expects net revenues in the range of $7.75 billion to $8.00 billion for fiscal 2017. Adjusted EBITDA is expected in the range of $1.02 billion to $1.04 billion. Adjusted EPS for fiscal 2017 is expected in the range of $3.35 to $3.45.

For the third quarter of 2017, the company expects to generate adjusted EBITDA in the range of $266 million to $278 million. It anticipates adjusted EPS between 87 cents to 93 cents.

Key Picks

Envision Healthcare has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical sector are Edwards Lifesciences Corporation EW, Fresenius Medical Care Corporation FMS and Dextera Surgical Inc. DXTR.

Notably, Edwards Lifesciences and Fresenius Medical sport a Zacks Rank #1 (Strong Buy), while Dextera has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. Notably, the stock has a return of 3.4% over the last three months.

Fresenius Medical yielded a strong return of 20.6% over the last one year. The stock has a long-term expected earnings growth rate of 30.5%.

Dextera has a projected sales growth of 54.8% for the current year. The stock promises a long-term expected earnings growth rate of 25%.

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