Tuesday after the bell, hospice care services provider Chemed, Corp. (CHE) reported an increase in profit for the third quarter, compared to the year-ago period on higher revenue as well as income from other sources compared to an expense a year ago.
Chemed, the owner of VITAS Healthcare Corp. and plumbing service provider Roto-Rooter, posted a profit of $19.21 million, compared with $16.95 million in the year-ago period. On a per share basis, earnings increased 13.5% to $0.84 from $0.74 in the prior-year period.
Analysts polled by Thomson Reuters expected earnings of $0.88 for the quarter. Analysts' estimates typically exclude one-time items.
Revenue increased 2.9% to $296.8 million from $288.31 million in the year-ago quarter due to increased admissions and higher Medicare price; partially offset by an increase in discharged patients. Analysts expected revenue of $298.54 million for the quarter.
VITAS net patient revenue advanced 5.9% to $217.1 million from $204.95 million, while Roto-Rooter revenue declined 4.4% to $79.7 million from $83.35 million in the year-ago period.
The company said, VITAS' gross margin was 23.4%, essentially flat with the year-earlier figure, while Roto-Rooter's gross margin expanded 133 basis points to 46.4% compared to the year-ago quarter.
During the quarter, the company recorded other income of $1.73 million, compared to other expense of $1.91 million in the same period a year ago.
For the nine-month period, net income increased to $55.79 million or $2.46 per share from $49.08 million or $2.08 per share last year. Revenue advanced to $886.98 million from $856.73 million a year ago.
Segment-wise, VITAS expects full year revenue growth, prior to Medicare Cap, of 5.7% to 6.2% with 98% to 100% admissions of prior-year total admissions. This guidance includes $1.25 million of estimated Medicare contractual billing limitations in the fourth quarter of 2009.
Roto-Rooter expects to achieve full-year revenue to range from 98% to 101% of 2008 full-year sales. The revenue estimate is a result of increased pricing of 5.0%, a favorable mix shift to higher revenue jobs, offset by a job count decline estimated at 7.0% to 8.0%.
CHE stock closed Tuesday's regular trading session at $46.59, down $0.74, on the NYSE.
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