AMN Stock Falls Despite Q3 Earnings & Revenues Beat, Margins Contract

Core Insights - AMN Healthcare Services, Inc. reported adjusted earnings per share (EPS) of 61 cents for Q3 2024, a decline of 69% year over year, but exceeded the Zacks Consensus Estimate by 5.2% [1] - The company's revenues for the third quarter were $687.5 million, down 19.4% year over year, yet also surpassed the Zacks Consensus Estimate by 2.6% [2] Revenue Breakdown - The Nurse and Allied Solutions segment generated revenues of $399.4 million, a decrease of 30.4% year over year, with travel nurse staffing revenues down 37% [4] - The Physician and Leadership Solutions segment's revenues were $180.6 million, reflecting a 13.2% increase year over year, driven by a 26% rise in locum tenens revenues [5] - The Technology and Workforce Solutions segment reported revenues of $107.5 million, down 10.7% year over year, with language interpretation services revenues at $75 million, up 13% [6] Margin Analysis - AMN Healthcare's gross profit fell 26.4% year over year to $213.1 million, with a gross margin contraction of 293 basis points to 30.9% [7] - Adjusted operating profit was $63.4 million, down 49.7% from the prior year, with an adjusted operating margin of 9.2%, a decline of 556 basis points [8] Financial Position - At the end of Q3 2024, AMN Healthcare had cash and cash equivalents of $30.6 million, down from $48 million at the end of Q2 2024, and total debt decreased to $1.135 billion from $1.195 billion [9] Future Guidance - For Q4 2024, AMN expects revenues between $685 million and $705 million, indicating a decline of 14-16% compared to the previous year [10] - The company anticipates a 21-24% revenue decline in the Nurse and Allied Solutions segment and a 9% decline in the Technology and Workforce Solutions segment, while projecting a 3% increase in the Physician and Leadership Solutions segment [11] Overall Performance - The overall performance of AMN Healthcare in Q3 2024 was disappointing, with significant declines in most segment revenues and margins [12] - Despite the challenges, the company noted progress in its market growth strategy and improvements in its sales pipeline, indicating potential for future recovery [14]