Shares of Encompass Health Corporation (EHC) gained 6.3% since it reported third-quarter 2024 results on Oct. 28. Strong quarterly results benefited from strong discharges, higher net revenue per discharge, and impressive growth-related initiatives. However, a rise in operating expenses, particularly in salaries and benefits, acted as a partial offset.EHC reported third-quarter adjusted earnings per share (EPS) of $1.03, which beat the Zacks Consensus Estimate by 9.6%. The bottom line increased 19.8% year o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ______________________________ Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 per share EHC New York Stock Exchange FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Num ...

Financial Data and Key Metrics Changes - Revenue increased by 11.9% to $1.35 billion and adjusted EBITDA increased by 13.4% to $269.3 million in Q3 2024 [10][22] - Total discharges increased by 8.8%, with net revenue per discharge increasing by 2.5% [22] - Bad debt expense as a percentage of revenue decreased to 1.9%, down 30 basis points from Q3 2023 and 100 basis points from Q2 2024 [23][24] - Adjusted free cash flow increased by 27.1% to $189.7 million, with a year-to-date total of approximately $0.5 billion [33] Business Line Data and Key Metrics Changes - Discharge growth was broad-based across geographies, payers, and patient types, with neurological and stroke conditions growing by 9% and 9.7% respectively [11] - Medicare discharges increased by 8.8% for the quarter, while Medicare Advantage discharges grew by 12.6% [11][67] Market Data and Key Metrics Changes - The demand for inpatient rehabilitation care is underserved and growing, with the age cohort most in need of these services expected to grow at a 4% to 5% CAGR [12] - By 2030, it is estimated that one in five Americans, over 70 million people, will be aged 65 or older, driving strong demand for inpatient rehabilitation services [12] Company Strategy and Development Direction - The company is continuing to invest in capacity additions, having added 99 beds during Q3, including two de novo hospitals [14] - The Houston project represents a milestone in the company's de novo construction strategy, utilizing full prefabrication to lower costs and shorten construction times [15] - The company anticipates building at least two de novos per annum with full prefabrication, with a robust pipeline of 15 development projects beyond 2024 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the updated guidance for 2024, anticipating net operating revenue of $5.325 billion to $5.375 billion and adjusted EBITDA of $1.07 billion to $1.09 billion [35] - The company is aware of potential impacts from community recovery post-hurricanes, which may affect volumes and length of stay in Q4 [21] Other Important Information - The company has a favorable leverage and liquidity position, with net leverage at 2.3 times compared to 2.7 times at year-end 2023 [34] - The company issued a notice of redemption for an incremental $100 million of its senior notes due in September 2025 [35] Q&A Session Summary Question: What drove the strong same-store volumes? - Management noted broad growth across all geographic regions and the ramp-up of facilities opened in previous years, contributing to market share gains [41][42] Question: Should FTE growth continue to increase? - Management indicated that total FTE growth is expected to correlate with discharge growth, stabilizing around 3.4% [44][45] Question: What is the estimated revenue impact from lower volumes due to hurricanes? - Management stated that the impact would be minor as hospitals resumed normal operations quickly, but they are evaluating potential longer lengths of stay due to community healthcare system disruptions [47] Question: Are there any expected delays in construction due to hurricanes? - Management confirmed that there are no expected delays for the hospitals scheduled to open in Florida next year, as the sites were secured in advance of the storms [49] Question: What are the key headwinds and tailwinds for 2025? - Management highlighted expected SWB per FTE inflation of 3% to 3.5% and noted uncertainty regarding provider tax contributions due to variability across states [58] Question: What is the company's exposure to election-related programs? - Management indicated that the Tennessee program is not a significant factor for the company, and historically, election outcomes have not had a major impact on operations [70][71]

Encompass Health (EHC) reported $1.35 billion in revenue for the quarter ended September 2024, representing a year-over-year increase of 11.9%. EPS of $1.03 for the same period compares to $0.86 a year ago. The reported revenue represents a surprise of +1.73% over the Zacks Consensus Estimate of $1.33 billion. With the consensus EPS estimate being $0.94, the EPS surprise was +9.57%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wa ...

Encompass Health (EHC) came out with quarterly earnings of $1.03 per share, beating the Zacks Consensus Estimate of $0.94 per share. This compares to earnings of $0.86 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 9.57%. A quarter ago, it was expected that this rehabilitation hospital operator would post earnings of $1.01 per share when it actually produced earnings of $1.11, delivering a surprise of 9.90%. Over the last fo ...

Exhibit 99.1 Media Contact October 28, 2024 Polly Manuel, 205 969-4532 polly.manuel@encompasshealth.com Investor Relations Contact Mark Miller, 205 970-5860 mark.miller@encompasshealth.com Encompass Health reports results for third quarter 2024 Increases full-year guidance BIRMINGHAM, Ala. - Encompass Health Corporation (NYSE: EHC), the largest owner and operator of inpatient rehabilitation hospitals in the United States, today reported its results of operations for the third quarter ended September 30, 202 ...

Analysts on Wall Street project that Encompass Health (EHC) will announce quarterly earnings of $0.94 per share in its forthcoming report, representing an increase of 9.3% year over year. Revenues are projected to reach $1.33 billion, increasing 10% from the same quarter last year.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.Prior to a company's ear ...

Group 1 - Encompass Health Corporation announced the redemption of $100 million of its 5.75% senior notes due 2025, with a redemption date set for November 21, 2024, at a price of 100.0% of par plus accrued interest [1] - The company plans to utilize cash on hand for the redemption and anticipates recording an approximate $0.2 million loss on early extinguishment of debt in Q4 2024 [1] Group 2 - Encompass Health is the largest owner and operator of rehabilitation hospitals in the United States, with 165 hospitals across 38 states and Puerto Rico [2] - The company is recognized for providing high-quality rehabilitative care and has received accolades such as being ranked among Fortune's World's Most Admired Companies [2]

Core Insights - Encompass Health (EHC) is currently viewed as a better investment option compared to Astrana Health, Inc. (ASTH) based on Zacks Rank and earnings estimate revisions [1][3] Valuation Metrics - EHC has a forward P/E ratio of 22.93, while ASTH has a significantly higher forward P/E of 45.94 [2] - EHC's PEG ratio stands at 1.46, indicating a more favorable valuation relative to its expected earnings growth, compared to ASTH's PEG ratio of 2.29 [2] - EHC's P/B ratio is 3.88, which is lower than ASTH's P/B ratio of 4.32, suggesting EHC is more reasonably priced in terms of its book value [2] Value Grades - EHC has received a Value grade of A, while ASTH has a Value grade of C, reflecting EHC's stronger valuation metrics and improving earnings outlook [3]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Encompass Health (EHC) driven by higher revenues, with the earnings report expected on October 28, 2024, being crucial for stock price movement based on actual results compared to estimates [1] Earnings Estimates - Encompass Health is projected to report quarterly earnings of $0.94 per share, reflecting a year-over-year increase of +9.3% [2] - Expected revenues for the quarter are $1.33 billion, which represents a 10% increase from the same quarter last year [2] Estimate Revisions - The consensus EPS estimate has been revised 0.04% lower in the last 30 days, indicating a slight reassessment by analysts [3] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Encompass Health is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +0.13%, suggesting a bullish outlook from analysts [4][6] - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [5] Historical Performance - In the last reported quarter, Encompass Health exceeded the expected earnings of $1.01 per share by delivering $1.11, resulting in a surprise of +9.90% [7] - The company has beaten consensus EPS estimates in all of the last four quarters [7] Conclusion - Encompass Health is positioned as a compelling candidate for an earnings beat, with a positive Earnings ESP and a Zacks Rank of 2, although other factors should also be considered before making investment decisions [8]