First-quarter earnings reports by Envision Healthcare and Select Medical Holdings have sent their stock prices in opposite directions during mid-day trading Friday.
By beating analyst expectations for revenue and adjusted EBITDA in the quarter, Envision Healthcare saw an 8% or $1.79 gain to its stock price at 12:35 p.m. ET.
Adjusted EBITDA at the physician staffing and ambulance company rose 18% to $151.6 million in the quarter compared with $128.9 million in the year-earlier quarter, the company reported. Revenue in the quarter jumped 28% to $1.6 billion from $1.2 billion a year ago.
In a note to investors Friday, Canaccord Genuity analyst Richard Close said Envision Healthcare had shed unprofitable physician-staffing contracts and saw revenue growth from new and existing contracts to provide physician staffing in hospital emergency departments as well as among hospitalists and radiologists. Envision Healthcare is based in Greenwood Village, Colo.
First-quarter earnings for Select Medical rose overall, but revenue was flat in its giant specialty hospital division. Adjusted EBITDA actually fell, the company reported.
In an earnings call Friday, Chief Financial Officer Martin Jackson said Select Medical lost some admissions to its post-acute-care hospitals in the quarter because it is focusing on taking only the sickest patients under new Medicare payment guidelines.
The company expects the volumes to rebound quickly, so it has chosen not to adjust nursing levels at the hospitals because there is a shortage, and it would be difficult and expensive to hire new nurses, he said.
Notwithstanding that wobble, Mechanicsburg, Penn.-based Select Medical posted a 10% increase in income from operations to $86.9 million during the quarter from $79.3 million in the year-earlier quarter.
Revenue soared 37% to $1.1 billion from $795.3 million, in part, from about a month's worth of volume from Select Medical's newly acquired Physiotherapy Associates Holdings, a national provider of outpatient physical rehabilitation care that makes Select Medical now the largest provider in the industry.
The stock price of Select Medical was trading 70 cents lower to $12.37, or 5%, at 12:35 p.m. ET.
