Chemed Q4 Earnings & Revenues Top, Stock Climbs, Margins Contract

Core Viewpoint - Chemed Corporation reported better-than-expected earnings and revenues for the fourth quarter of 2024, driven by strong performance in its VITAS segment and an acquisition that bolstered its metrics [14]. Financial Performance - The adjusted earnings per share (EPS) for the fourth quarter was $6.83, a 3.5% increase year over year, surpassing the Zacks Consensus Estimate by 0.5% [1] - The GAAP EPS was $6.02, reflecting a 2% increase from the previous year [2] - Full-year adjusted EPS reached $23.13, marking a 13.9% increase from the prior year [2] - Revenues for the fourth quarter improved by 9.2% year over year to $640 million, exceeding the Zacks Consensus Estimate by 1.7% [3] - Total revenues for the full year were $2.43 billion, up 7.4% from the previous year [3] Segment Performance - VITAS segment reported net patient revenues of $411 million in the fourth quarter, a 17.4% increase year over year, driven by a 14.6% rise in days of care and a nearly 3.5% increase in Medicare reimbursement rates [5] - Roto-Rooter segment reported sales of $229 million, down 2.9% year over year, with mixed performance across its services [7][8] Margin Analysis - Gross profit for the fourth quarter increased by 2.9% year over year to $234.1 million, but gross margin contracted by 226 basis points to 36.6% due to rising service costs [9] - SG&A expenses rose by 3.8% year over year to $104 million, while adjusted operating profit increased by 2.1% to $129.8 million, with adjusted operating margin contracting by 141 basis points to 20.3% [9] Liquidity and Capital Structure - At the end of the fourth quarter, the company had cash and cash equivalents of $178.4 million, down from $264 million at the end of 2023, with no current or long-term debt [11] - The cumulative net cash provided by operating activities was $417.5 million compared to $330.3 million in the previous year [11] - The company repurchased 388,235 shares for $57.8 million, with approximately $255.3 million remaining under its share repurchase authorization [12] Future Guidance - For 2025, Chemed expects VITAS revenues to increase by 10.5% to 11.3% from 2024 levels, with total revenue estimates pegged at $2.57 billion, indicating a 5.8% year-over-year improvement [13] - The adjusted EPS for full-year 2024 is expected to be in the range of $24.95-$25.45, implying an 8.5% growth over the 2024 adjusted figure [13]