Core Insights - Chemed Corporation (CHE) reported third-quarter 2025 adjusted earnings per share (EPS) of $5.27, a decline of 6.6% year over year, missing the Zacks Consensus Estimate by 2.2% [1] - The company's GAAP EPS was $4.46, down 10.8% from the previous year [1] Revenue Performance - Revenues for the quarter increased by 3.1% year over year to $624.9 million, but fell short of the Zacks Consensus Estimate by 0.5% [2] - The stock price dropped by 2.7% in after-hours trading, reflecting investor concerns regarding the declining EPS [2] Segment Analysis - Chemed operates through two subsidiaries: VITAS, a provider of end-of-life care, and Roto-Rooter, a plumbing and drain cleaning service provider [3] - VITAS reported net patient revenues of $407.7 million, up 4.2% year over year, driven by a 2.5% increase in days-of-care and a nearly 4.1% rise in the Medicare reimbursement rate [4] - Roto-Rooter generated sales of $217.2 million, a 1.1% increase year over year, with commercial revenues up 2.8% [5] - Residential revenues for Roto-Rooter increased by 3.4% year over year, with notable growth in plumbing (8.2%) and water restoration (6.8%) [6] Margin and Profitability - Gross profit decreased by 6.2% year over year to $196.9 million, with gross margin contracting by 313 basis points to 31.5% due to an 8% rise in service costs [7] - Selling, General and Administrative (SG&A) expenses rose by 3.7% year over year to $105.8 million, leading to a 15.6% decline in adjusted operating profit to $91.1 million [7] Liquidity and Capital Structure - At the end of Q3 2025, Chemed had cash and cash equivalents of $129.8 million, down from $249.9 million at the end of Q2 [10] - The company reported no current or long-term debt and cumulative net cash from operating activities of $254.7 million, slightly up from $252.6 million in the previous year [10] Share Repurchase and Dividends - Chemed repurchased 407,500 shares for $180.8 million, averaging $443.62 per share, with approximately $301.8 million remaining under its share repurchase authorization [11] - The company has a consistent dividend-paying history, with a five-year annualized dividend growth of 10.47% [11] Future Guidance - For 2025, Chemed expects VITAS revenues to increase by 10.5% to 11.3% and Roto-Rooter revenues to grow by 2.4% to 3.0% [12] - The total revenue estimate for 2025 is projected at $2.55 billion, indicating a 4.9% year-over-year improvement [12] - The adjusted EPS for the full year 2025 is expected to be in the range of $24.95-$25.45, with a Zacks Consensus Estimate of $22.03, reflecting a 4.8% decline from 2024 [13]