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Sep 30, 2021
Encompass Health Q3 2021 Earnings Report
Encompass Health reported solid financial results with year-over-year growth in revenues and Adjusted EBITDA, but revised full-year guidance for 2021 due to COVID-related headwinds.
Key Takeaways
Encompass Health's Q3 2021 results showed revenue growth and Adjusted EBITDA increase. The inpatient rehabilitation business experienced strong revenue and Adjusted EBITDA growth, while the home health and hospice business faced COVID-related headwinds. The company lowered its full-year 2021 guidance due to these challenges.
Consolidated net operating revenues increased by 9.4% year-over-year to $1,284.8 million.
Income from continuing operations attributable to Encompass Health per diluted share increased by 28.2% to $1.00.
Adjusted earnings per share increased by 32.1% to $1.03.
Inpatient rehabilitation segment revenue grew by 12.4%, driven by increased volumes and pricing.
Forward Guidance
The Company revised its full-year guidance as follows:
Positive Outlook
- Net operating revenues are expected to be between $5,080 million and $5,130 million.
- Adjusted EBITDA is projected to be between $1,025 million and $1,045 million.
- Adjusted earnings per share from continuing operations attributable to Encompass Health are anticipated to be between $4.23 and $4.38.
- The company expects to effect the partial or full separation of its home health and hospice business into an independent public company.
- The company believes that effecting the separation via the formation of an independent public company is superior to the other alternatives considered.
Challenges Ahead
- Lowered full-year 2021 guidance due to current challenges.
- Home health and hospice business experienced COVID-related headwinds which limited volume growth and increased costs.
- Strategic alternatives review costs negatively impacted income from operations.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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