Ensign Group Q3 Earnings Beat on Patient Days, Stock Up 4.1%

Core Viewpoint - The Ensign Group, Inc. (ENSG) reported strong third-quarter 2024 results, with a 4.1% increase in shares following the earnings announcement, driven by improved occupancy and higher skilled service revenues, although offset by rising expenses and declining cash flow from operations [1][2]. Financial Performance - Adjusted earnings per share (EPS) for Q3 2024 was $1.39, exceeding the Zacks Consensus Estimate by 1.5% and reflecting a 15.8% year-over-year increase [2]. - Operating revenues reached $1.08 billion, marking a 15% year-over-year improvement and surpassing the consensus estimate by 1.7% [2]. - Adjusted net income grew 17.7% year over year to $81.1 million, beating the estimate of $79.4 million [3]. Operational Metrics - Same-store occupancy improved by 280 basis points year over year, while transitioning occupancy expanded by 480 basis points [3]. - Total expenses increased by 15.3% year over year to $992.4 million, exceeding the estimate of $975.7 million, driven by higher service costs and administrative expenses [4]. Segment Performance - Skilled Services segment revenues rose 14.4% year over year to $1 billion, supported by improved occupancy and patient days, with segment income increasing by 9.1% to $128.5 million [5]. - Rental revenues in the Standard Bearer segment amounted to $24.4 million, growing 16.4% year over year, and segmental income rose 1.5% to $7.3 million [6]. Financial Position - As of September 30, 2024, cash and cash equivalents stood at $532.1 million, a 4.4% increase from the end of 2023, with total assets rising 10.8% to $4.6 billion [7]. - Long-term debt (less current maturities) decreased by 2% to $142.6 million, while total equity climbed nearly 16.9% to $1.8 billion [8]. Capital Deployment - No share buybacks occurred in the first nine months of 2024, while dividends paid amounted to $10.2 million [9]. 2024 Outlook - Revenue guidance for 2024 is projected between $4.25 billion and $4.26 billion, indicating a 14.1% improvement from 2023 [10]. - Adjusted EPS is forecasted to be between $5.46 and $5.52, suggesting over 15.1% growth from the previous year [10].