Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Amedisys (NASDAQ:AMED) is about to release its quarterly earnings. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Amedisys stands to gain a lot of home-health-care business from demographic trends in the U.S. in the coming years. But health-care reform has proved to be a tough bump in the road for Amedisys and its peers to get over. Let's take an early look at what's been happening with Amedisys over the past quarter and what we're likely to see in its quarterly report on Tuesday.

Stats on Amedisys

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$373.3 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will Amedisys keep healing this quarter?
Analysts have been a bit more optimistic about Amedisys and its earnings prospects in recent months, having kept estimates for the just-ended quarter steady but pushing full-year 2013 calls up by $0.02 per share. The stock has also reflected that optimism, posting a 12% gain since early December.

Amedisys started out the fourth quarter on a somewhat troubling note, as the company announced a new health-services contract with Humana (NYSE:HUM) back in October. Such deals are usually good news, but Amedisys agreed to a change in compensation that requires it to get paid on a per-visit basis, which will result in about a 50% haircut on what Humana had been paying the home-health-care provider. The stock plunged on fears that such a trend would take hold across the industry.

More broadly, though, Amedisys could see long-term gains from health-care reform, as the Affordable Care Act brings more patients into the health-insurance market. The question, though, is whether the Medicare reimbursement rates that Amedisys, Gentiva (UNKNOWN:GTIV.DL), and LHC Group (NASDAQ:LHCG) rely on will remain at their current levels. As Obamacare imposes new cost pressures on the industry, Amedisys and its peers will have to navigate carefully to keep their profits up, especially in light of some of the allegations these companies faced in previous years over their Medicare practices.

In its coming quarterly report, watch for Amedisys to discuss whether its relationships with other major health-insurance companies are seeing the same pressures that led to the Humana deal. If other insurers force Amedisys to accept pay cuts, then the stock could lose some of its recent gains.

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