Emergency Medical’s (
EMS) third quarter earnings per share came in at 66 cents, surpassing the Zacks Consensus Estimate of 60 cents but remained unchanged from the year ago period. The company reported revenues of $665.1 million, a decline of 2.1% compared to the third quarter of 2008.
Revenues would have been up by 15%, but for the Federal Emergency Management Agency (FEMA) hurricane deployment revenue of $101.1 million in 2008. The robust performance during the quarter was primarily driven by the signing of new contracts, increased volumes at the emergency departments, expansion of new service lines and improved resource utilization.
Emergency Medical operates two business segments - American Medical Response (AMR), its healthcare transportation services segment, and EmCare Holdings (EmCare), the outsourced hospital-based physician services segment. These two segments accounted for approximately 51% and 49%, respectively, of total revenues during the quarter.
During the quarter, AMR generated revenues of $338.8 million, a decrease of 20.4% compared to the third quarter last year. However, revenues increased by 4.5% excluding the $101.1 million of FEMA hurricane deployment revenue during the year ago period due to an improvement in revenue per transport and growth in managed transportation business, offset partially by lower transports due to the company’s exit from underperforming markets.
EmCare reported revenues of $326.3 million, an increase of 28.5% compared to the year ago quarter. The addition of 87 net new contracts since Jun 30, 2008 and increased revenue from existing contracts were responsible for the improved performance of the segment. Emergency Medical‘s operating expenses dropped to $85.51 million from $135.08 million in the year ago period, while compensation and benefits rose to $467.62 million from $426.76 million.
Selling, general and administrative expenses declined to $15.87 million from $20.51 million in the comparable quarter of last year. Despite a 2.1% year over year decline in revenues, controlled expenses increased operating income marginally to $55.47 million. At the end of the quarter, Emergency Medical had $331.1 million in cash and cash equivalents while the company generated free cash flow of $61.2 million.
The company expects to utilize these funds for suitable acquisitions. In addition to posting strong quarterly results, Emergency Medical reiterated its guidance for 2009. The company expects its earnings per share at the higher end of its existing guidance range of $2.38-$2.48.
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