Select Medical Up 13.8% Since Q3 Earnings Top on Patient Day Growth

Core Viewpoint - Select Medical Holdings Corporation (SEM) experienced a 13.8% increase in stock price following the release of its third-quarter 2024 results, attributed to upward revisions in revenue and adjusted EBITDA outlook, driven by growth in patient days and revenue per patient day at its hospitals [1][2]. Financial Performance - SEM reported adjusted earnings per share (EPS) of 50 cents, exceeding the Zacks Consensus Estimate by 38.9%, with an 8.7% year-over-year increase [2]. - Net operating revenues reached $1.76 billion, reflecting a 5.4% year-over-year growth and surpassing the consensus mark by 2.3% [2]. - Total costs and expenses rose 5.5% year over year to $1.54 billion, which was lower than the estimated $1.59 billion [3]. - Adjusted EBITDA was $205.5 million, a 6% year-over-year increase, exceeding the estimate of $190.3 million [3]. Segment Performance - Critical Illness Recovery Hospital: Revenues were $583 million, a 3.4% year-over-year increase, but fell short of estimates. Revenue per patient day increased by 2.4%, while patient days improved by 1.1% [4]. - Rehabilitation Hospital: Revenues grew 14.4% year over year to $282.7 million, surpassing estimates. Adjusted EBITDA rose 12.1% to $60.1 million [6]. - Outpatient Rehabilitation: Revenues reached $312 million, a 6.9% year-over-year increase, driven by a 5.6% rise in patient visits [7]. - Concentra: Revenues were $489.6 million, a 3.3% year-over-year increase, exceeding estimates. Adjusted EBITDA improved 2.7% to $101.6 million [8]. Financial Position - As of September 30, 2024, SEM had cash and cash equivalents of $191.5 million, up from $84 million at the end of 2023. Total assets increased to $8 billion from $7.7 billion [9]. - Long-term debt decreased to $3.1 billion, while total equity rose to $2.3 billion from $1.5 billion at the end of 2023 [9]. Cash Flow and Shareholder Returns - SEM generated cash flow from operations of $181 million in the reported quarter, a 55.5% year-over-year increase [10]. - The company did not repurchase shares in Q3 2024 but declared a cash dividend of 12.5 cents per share, payable on November 26, 2024 [11]. 2024 Outlook - Management revised revenue guidance to between $6.95 billion and $7.15 billion, indicating a 5.2% growth from 2023 [12]. - Adjusted EBITDA is expected to be between $865 million and $885 million, suggesting an 8.4% rise from the previous year [12]. - EPS is projected to be between $2.01 and $2.12, reflecting an 8.1% improvement from 2023 [13].