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Dec 31, 2020
Encompass Health Q4 2020 Earnings Report
Reported results for the fourth quarter of 2020 and issued full-year 2021 guidance and longer term growth targets.
Key Takeaways
Encompass Health reported positive results for Q4 2020, demonstrating the resilience of its business model. The company successfully met the needs of patients, employees, and business partners throughout the year, and remains confident in its business and long-term prospects for 2021.
Net operating revenues increased by 2.5% compared to Q4 2019.
Income from continuing operations attributable to Encompass Health per diluted share increased by 26.5% compared to Q4 2019.
Adjusted earnings per share increased by 9.4% compared to Q4 2019.
Cash flows provided by operating activities increased by 29.7% compared to Q4 2019.
Encompass Health
Encompass Health
Forward Guidance
The Company provided the following guidance for full-year 2021 and growth targets for 2020 through 2025. The Company's 2021 guidance and longer term growth targets assume the continuation of the current structure of the business. The guidance and growth targets may change depending on the ultimate outcome of the review.
Positive Outlook
- Net operating revenues $5,000 to $5,170 million
- Adjusted EBITDA $925 to $955 million
- Adjusted earnings per share from continuing operations attributable to Encompass Health $3.31 to $3.53
- Net operating revenues 8% to 10% CAGR
- Adjusted EBITDA 8% to 10% CAGR
Challenges Ahead
- Adjusted free cash flow 5% to 7% CAGR
- Base year 2020 adjusted free cash flow benefited from a temporary payroll tax holiday.
- Exclusive of this item, the adjusted free cash flow CAGR target would be 8% to 10%.
- The review is ongoing, and no decision has been made.
- The guidance and growth targets may change depending on the ultimate outcome of the review.