Chemed Misses Where It Counts

Chemed (NYSE: CHE  ) reported earnings on April 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Chemed met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share grew significantly.

Gross margins dropped, operating margins increased, net margins increased.

Revenue details
Chemed logged revenue of $352.9 million. The four analysts polled by S&P Capital IQ predicted revenue of $349.9 million on the same basis. GAAP reported sales were 6.7% higher than the prior-year quarter's $330.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $1.17. The five earnings estimates compiled by S&P Capital IQ anticipated $1.25 per share on the same basis. GAAP EPS of $1.06 for Q1 were 26% higher than the prior-year quarter's $0.84 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 27.1%, 110 basis points worse than the prior-year quarter. Operating margin was 9.9%, 70 basis points better than the prior-year quarter. Net margin was 5.8%, 30 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $351.7 million. On the bottom line, the average EPS estimate is $1.27.

Next year's average estimate for revenue is $1.43 billion. The average EPS estimate is $5.41.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 91 members out of 103 rating the stock outperform, and 12 members rating it underperform. Among 35 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 33 give Chemed a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Chemed is outperform, with an average price target of $65.40.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 22, 2012, at 9:52 PM, thefixerisin wrote:

    The company is in trouble. Medicare fraud,several state consumer fraud investigations,several vbreach of contract,truth in repair state law suits,federal class actions and securities and executive compensation fraud. Yup.... its not looking good because their are several of us who a re exposing this 1.4 billion dollar a year fraud.Their entire business model is based on fraud...its just a bunch of rich old farts pretending to be executives...seriously it is.

  • Report this Comment On April 22, 2012, at 9:52 PM, thefixerisin wrote:

    They are doing this withg shareholders money.

  • Report this Comment On April 26, 2012, at 6:09 AM, tincupinhand wrote:

    I won't defend the management of this company...they add little to no value. But the hospice business is very solid in an industry with poor service from many not-for-profits and ambivalent service from many for profits...Vitas is the relative best. They handled the Medicare issues well...the fired management guy who caused the issues and then teamed up with an attorney to enrich themselves. RR is going to get fixed fast. Note that every government agency is out raising funds via a fraud and abuse excuse...once again.

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Chemed CAPS Rating: **