Healthcare stock under pressure: AMN Healthcare Services, Inc. (NYSE: AMN)

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AMN Healthcare Services, Inc. (NYSE: AMN) stock fell over 2.2% on 1st November, 2019 (as of 10:05 am GMT-4; Source: Google finance) after the company posted better than expected results for the third quarter of FY 19. On an organic basis the revenue remained flat sequentially and up 1% over prior year. Gross margin for the third quarter was above the company’s guidance at 33.5%, which reflects up by 30 basis points from last year and in line with the prior quarter. The year-over-year growth is on back of higher margins in the Nurse and Allied and Other Workforce Solutions segments along with a favorable business mix shift within those segments. Third quarter Nurse and Allied segment revenue grew 18% to $363 million than prior year and up 9% sequentially and included $37 million from the Advanced acquisition. At the end of September 2019, the cash and equivalents totaled $41 million and total debt outstanding was $620 million. Capital expenditures in the third quarter were $9 million.

Moreover, for the third quarter, on an organic basis the segment revenue grew 6% on the back of double-digit growth in the Allied international and rapid response business lines. Nurse and Allied gross margin was up by 50 basis points better to 27.9% than prior year and up 40 basis points from prior quarter. The Segment’s EBITDA margin was at 13.1%. The company reported 17% decline in the third quarter Locum Tenens segment revenue to $84 million versuus prior year and up 3% on a sequential basis. Gross margin was 30 basis points lower to 27.5% than the prior quarter. Segment EBITDA margin of 7.3% was in line with the company’s expectations. Other Workforce Solutions segment revenue grew by 1% to $121 million in the third quarter year-over-year and flat sequentially. Segment gross margin had increased 190 basis points to 54.3%  year-over-year and 30 basis points sequentially due to a favorable shift in business mix within the segment.

AMN in the third quarter of FY 19 has reported the adjusted earnings per share of 81 cents, beating the analysts’ estimates for the adjusted earnings per share of 73 cents, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 8 percent to $567.6 million in the third quarter of FY 19, beating the analysts’ estimates for revenue of $563.3 million.

For the fourth quarter ending in December, AMN Healthcare expects revenue to be in the range of $573 million to $579 million.

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