Encompass Health Corporation Sees Significant Growth in Third-Quarter Results

BIRMINGHAM, Ala. — Encompass Health Corporation (NYSE:EHC), a leading inpatient rehabilitation hospital operator, reported impressive third-quarter results, exceeding analysts’ expectations and prompting a 5% increase in after-hours trading on Monday.

The company’s third-quarter performance was marked by adjusted earnings per share of $1.03, surpassing the consensus estimate of $0.94. Revenue reached $1.35 billion, outpacing analysts’ expectations of $1.33 billion, representing an 11.9% year-on-year increase.

Strong discharge growth of 8.8%, including same-store growth of 6.8%, was the primary driver of revenue growth. Additionally, net revenue per discharge increased by 2.5% compared to the same period last year.

President and CEO Mark Tarr expressed his satisfaction with the third-quarter performance, stating, “We are very pleased with our third quarter performance, with strong discharge growth driving revenue growth of 11.9% and adjusted EBITDA growth of 13.4%.”

Looking ahead, Encompass Health has raised its full-year guidance for fiscal 2024. The company now expects adjusted earnings per share of $4.19 to $4.33, up from the previous forecast of $3.97 to $4.22. This revised outlook surpasses the consensus estimate of $4.19. Furthermore, the company has increased its revenue forecast to a range of $5.325 billion to $5.375 billion, from the previous range of $5.275 billion to $5.350 billion.

The improved outlook suggests that Encompass Health’s inpatient rehab services will continue to gain momentum in terms of patient volume and pricing power.