Chemed(US:CHE) The Motley Foolยท2025-07-30 18:49Core Insights - Chemed missed expectations on both revenue and earnings for Q2, leading to a 9% decline in share price [1] - The company reported a 4% increase in sales but a significant 22% drop in adjusted earnings per share (EPS) [2] - Management has lowered the 2025 EPS guidance from $25.20 to $22.15, indicating a 4% decline from the previous year [2] - CEO of Vitas Healthcare, Nick Westfall, announced his resignation, adding to the uncertainty surrounding the company [2] Revenue and Profitability - Chemed's Q2 revenue growth was steady at 4%, but profitability issues were evident across all business segments [3] - Vitas Healthcare experienced a 4% revenue growth but faced Medicare cap billing limitations, resulting in a 24% decline in earnings [4] - Excluding one-time impacts, Vitas's adjusted EBITDA remained flat for the quarter [4] Roto-Rooter Performance - Roto-Rooter, Chemed's plumbing business, achieved only 1% sales growth while net income fell by 20% due to increased marketing costs [6] - The company faces challenges from advertising pressures, particularly from Google, which affects visibility in free search areas [6] - Despite these challenges, Roto-Rooter remains the largest plumbing company in North America, warranting investor attention [7] Future Outlook - Chemed is currently navigating several challenges but is valued at 20 times free cash flow, suggesting potential for a turnaround [7]