MEDNAX, Inc. MD delivered
fourth-quarter 2018 adjusted earnings of 92 cents per share,
beating the Zacks Consensus Estimate by 10.8%. Moreover, the bottom
line improved nearly 12.2% year over year, led by revenue increase
partly offset by rise in expenses.
In spite of the earnings beat, the stock declined 0.9% on
disappointing guidance for first quarter of 2019. Management guided
EPS in the range of 67 to 75 cents, which is below the current
Zacks Consensus Estimate of 87 cents.
Quarterly Details
The company generated revenues of $932.7 million, surpassing the
Zacks Consensus Estimate by 2.7%. Also, the top line was up
2.4% from the year-ago period, mainly supported by a significant
improvement in managed care contracting. Same unit revenues inched
up 2.8% year over year, mainly driven by recent buyouts and higher
patient volume. However, this upside was offset by the non-renewal
of a few contracts.
General and administrative expenses rose 3.6% to $112.8
million.
Interest expense of the company escalated 28.3% to $25.4 million ,
primarily due to higher effective interest rate on borrowings
between two periods.
In the quarter under review, EBITDA totaled $136.7 million, down by
nearly 11.6%.
The company paid a total of $89.3 million in the reported quarter
to purchase three radiology and one neonatology practices and also
to make contingent purchase price payments for prior buyouts.
Mednax, Inc Price, Consensus and EPS Surprise
Mednax, Inc Price, Consensus and EPS Surprise | Mednax, Inc Quote
Financial Update
As of Dec 31, 2018, the company had cash and cash equivalents of
about $36 million, down 40% from year end 2017.
The company incurred total debt of $1.9 billion, up 6.6% from
2017-end level and total assets of $5.9 billion, up 1.5% from the
level at 2017 end.
Cash flows from operating activities were $127.6 million, down
34.7% year over year.
First-Quarter Outlook
For the first quarter of 2019, the company expects adjusted EPS to
be in the band of 67-75 cents. Mednax projects adjusted EBITDA in
the range of $108-$118 million.
This guidance assumes that total same-unit revenue growth for the
three months ended Mar 31, 2019 will be in a range of flat to 2 %
from the prior-year period.
Shares outstanding are predicted to be around 87.3 million.
Preliminary 2019 Guidance
On a preliminary basis, the company estimates adjusted EBITDA to be
in the band of $550-$580 million.
The company intends to utilize part of the remaining $250 million
share repurchase authorization through open market purchases in the
first quarter of 2019.
Zacks Rank
MEDNAX carries a Zacks Rank #3 (Hold). You can see the
complete list of todayâs Zacks #1 Rank (Strong Buy) stocks
here.
Upcoming Releases From Medical
Sector
Some stocks worth considering from the medical sector are as
follows:
Constellation Pharmaceuticals, Inc. CNST is set to report
fourth-quarter 2018 earnings performance on Feb 14. The stock has
an Earnings ESP of +9.72% and a Zacks Rank of 2.
Tenet Healthcare Corporation THC is slated to announce
fourth-quarter earnings on Feb 25. The company is a Zacks #3 Ranked
player and has an Earnings ESP of +5.63%.
Alder BioPharmaceuticals, Inc. ALDR has an Earnings ESP of +13.52%
and a Zacks Rank #2 (Buy). The company is scheduled to release
fourth-quarter earnings on Feb 25.
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