Encompass Health Reveals Impressive First Quarter Performance

Increases in Full-Year Guidance

Encompass Health Corporation (NYSE: EHC), a leader in the operation of rehabilitation hospitals across the country, recently published its operational results for the first quarter. This quarter marked a notable performance boost, showing resilience and effective management strategies. As a result, the company has amplified its full-year guidance metrics.

Summary of Results

The report outlines significant financial highlights and operational achievements. Key metrics highlight the following insights:

• Net operating revenue reached an impressive $1,455.4 million, marking a substantial increase from $1,316.0 million the previous year.
• Income from continuing operations attributable to Encompass Health per diluted share stood at $1.48, up from $1.11, reflecting a remarkable growth of 33.3% year-on-year.
• Adjusted earnings per share rose to $1.37, demonstrating a 22.3% increase compared to $1.12.
• Cash flows provided by operating activities surged by 20.9%, totaling $288.6 million, primarily fueled by a discernible rise in net income.
• Adjusted EBITDA improved substantially by 14.9%, aligning with the revenue growth.

Mark Tarr, President and CEO of Encompass Health, expressed optimism regarding their upward trajectory. "We are very pleased with our first quarter performance, which drove a 10.6% increase in revenue and a 14.9% increase in Adjusted EBITDA," he stated. He further elaborated on their capital expansion, unveiling initiatives including the opening of a new hospital and additional beds at existing facilities to bolster service capacity.

Revised Guidance for 2025

In consideration of the growth outlook, Encompass Health has upgraded its full-year expectations. The revised forecasts include:

• Net operating revenue projected between $5,850 million and $5,925 million, up from previous expectations.
• Adjusted EBITDA estimates increased to between $1,185 million and $1,220 million.
• Adjusted earnings per share now anticipated to be between $4.85 and $5.10, a clear enhancement over previous estimates of $4.67 to $4.96.

Operational and Financial Highlights

As the company continues to enhance its operational strategies, several key performance indicators stand out:

Total discharges increased by 6.3% while same-store discharge growth reached 4.4%. Averaged net patient revenue per discharge was reported at $21,816, indicating a rise of 3.9% year-on-year. The growth can be attributed to both improved service capacity and strategic price adjustments, reinforcing the company’s position in the rehabilitation market.

Capital Expenditure and Investments

The company’s commitment to investment in infrastructure and service quality was evident in its capital expenditures for the quarter. Their focus on maximizing recovery through advanced rehabilitation techniques was evident, reinforcing Encompass Health's reputation as a top-tier provider in the rehabilitation healthcare space.

Frequently Asked Questions

What are the latest financial results for Encompass Health?

Encompass Health reported a net operating revenue of $1,455.4 million for the first quarter, up from $1,316.0 million last year.

How has the company updated its guidance for 2025?

The company has raised its revenue guidance to $5,850 - $5,925 million and adjusted EBITDA to $1,185 - $1,220 million.

What drove the revenue growth this quarter?

A growth in discharges by 6.3%, coupled with a 20.9% increase in cash flows from operating activities, contributed to the revenue spike.

How much did Encompass Health expand its capacity?

Encompass Health opened one new 40-bed hospital and added 25 beds to existing facilities this quarter to expand service capacity.

What was the adjusted EBITDA for the quarter?

The adjusted EBITDA for the first quarter was reported at $313.6 million, reflecting a 14.9% growth year-over-year.

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