Select Medical Holdings Misses on Both Revenue and Earnings (SEM)

Select Medical Holdings Misses on Both Revenue and Earnings

Select Medical Holdings (NYSE: SEM ) reported earnings on Nov. 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Select Medical Holdings missed slightly on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew slightly and GAAP earnings per share didn't change.

Gross margins contracted, operating margins grew, net margins dropped.

Revenue details
Select Medical Holdings logged revenue of $713.7 million. The eight analysts polled by S&P Capital IQ wanted to see sales of $727.7 million on the same basis. GAAP reported sales were 2.8% higher than the prior-year quarter's $694.1 million.

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

EPS details
EPS came in at $0.20. The eight earnings estimates compiled by S&P Capital IQ averaged $0.21 per share. GAAP EPS of $0.17 were the same as the prior-year quarter.

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 16.1%, 430 basis points worse than the prior-year quarter. Operating margin was 9.9%, 10 basis points better than the prior-year quarter. Net margin was 3.4%, 30 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $746.0 million. On the bottom line, the average EPS estimate is $0.24.

Next year's average estimate for revenue is $2.96 billion. The average EPS estimate is $1.04.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 51 members out of 54 rating the stock outperform, and three members rating it underperform. Among 13 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 11 give Select Medical Holdings 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 Select Medical Holdings is hold, with an average price target of $12.75.

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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. The Motley Fool has no positions in the stocks mentioned above. 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.

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