A better-than-expected third quarter boosted home health giant Amedisys Inc.’s shares to a three-year high Wednesday, as its stock briefly spiked by more than 19 percent before easing back.
The Baton Rouge-based company reported a third-quarter profit of $8.4 million, or 26 cents per share, easily whipping past Wall Street analysts’ projections.
Stock analysts surveyed by Zack’s Investment Research forecast a profit of 17 cents per share. Analysts surveyed by Thomson Reuters were expecting 15 cents per share.
Brian Tanquilut, senior vice president, health care services equity research, at Jefferies & Co., said Amedisys successfully turned around its business in just nine months.
“The stock is showing that. They’re being rewarded for it with a 15 percent move up in the stock today, after what seems like $12 a year ago,” Tanquilut said.
Amedisys shares closed at $25.22, up $3.46, or 15.9 percent. Some 1.6 million shares changed hands, more than four times the average trading volume.
Under Interim Chief Executive Officer Ronald A. Laborde and Interim Chief Financial Officer Dale Redman, Amedisys has cut costs, closed and consolidated poor-performing care centers, and strengthened patient admission and volume numbers, Tanquilut said.
The company went from 464 care centers and 14,300 employees at the end of 2013 to 401 centers and 13,400 employees as of Sept. 30. Amedisys slashed operating expenses by nearly 38 percent over the 12-month period, from $455.5 million to $284.0 million.
“I think all the things that Ronnie has done since he took over are finally paying off,” Tanquilut said.
During a Wednesday morning conference call with investors and stock analysts, Laborde said he was pleased with the company’s progress but more work remains.
One of the few minuses in Amedisys’ report was a slight dip in revenue, from $301.3 million a year ago to $300.3 million for the three months ending Sept. 30.
Tanquilut said about the only question remaining for the company is the CEO search.
Founder William Borne left the company in February, and Amedisys launched a national search for a replacement.
“I don’t think that’s that big of an issue, in all honesty, considering that both Ronnie and Dale have been able to bootstrap good performance and turn the business around, even in interim positions,” Tanquilut said.