Through the economic slowdown, unemployment levels soared. But one area that has never really seen a glut of workers is the healthcare industry, where skilled healthcare professionals like physicians, nurses, administrators, and other support staff have remained in high demand. When hospitals and other healthcare providers need staffing, they often turn to AMN Healthcare (NYSE:AMN), which provides workforce solutions that can help streamline staffing issues.
Coming into Thursday afternoon's fourth-quarter financial report, AMN had ridden a wave of optimism higher, as its shares had doubled since May. Even with high expectations from shareholders, AMN delivered solid results that should further bolster the bullish case for the stock. Let's take a closer look at AMN Healthcare, and what its latest results mean for the company's future.
AMN finishes 2014 on a healthy note
AMN Healthcare's fourth-quarter results put an explanation point on a good year for the company. Revenue soared 12% from the previous year's quarter, to $279.6 million, easily outpacing the $267 million that investors following the stock had been looking to see. Adjusted earnings came in at $0.21 per share, topping consensus expectations of $0.18, and representing almost 24% growth from last year's fourth quarter.
Digging into AMN's various segments, the healthcare-staffing specialist saw growth in operating income from all three of its key areas. The primary nurse and allied healthcare staffing unit, which makes up about two-thirds of AMN's total operating income, posted 23% gains during the quarter, and revenue from physician permanent-placement services climbed at an even faster 25% pace.
The locum tenens staffing division, which involves people willing to fill in for other healthcare professionals on a temporary basis, posted the slowest growth; but even that division saw operating income climb 11%, and had the highest growth rate for the full 2014 year of all three of AMN's segments. Similar trends in overall revenue among the segments were consistent, as nurse and allied healthcare revenue climbed 17%, while permanent placement gained 14%, and locum tenens straggled in with 3% gains.
CEO Susan Salka was pleased with AMN Healthcare's results. "The market environment accelerated mid-year," said Salka, "as a stronger economy and millions of newly insured Americans released pent-up demand for both health care services and the underlying clinical labor that delivers patient care."
How will AMN's prognosis get even better?
AMN Healthcare doesn't see the good times ending anytime soon. "Our stronger portfolio of services and differentiated capabilities," Salka said, "combined with the favorable market conditions, give us a very optimistic outlook for 2015."
Acquisitions have played a huge role in helping AMN bulk up its offerings to clients. The company acquired Avantas in December, and added Onward Healthcare, Locum Leaders, and Medefis just last month. Avantas will add to AMN's ability to provide cloud-based data analytics and workforce consulting technology to its clients, and Medefis offers a similar cloud-based vendor management system for healthcare facilities.
On the personnel front, Onward specializes in nurses and allied healthcare staffing, while Locum has its focus on locum-tenens services. Together, AMN should be able to offer its clients tailored solutions to meet their individual needs more effectively as a result of these acquisitions.
Indeed, AMN Healthcare expects those acquisitions to pay off quite quickly. The company gave revenue guidance of $310 million to $314 million for the first quarter, which would equate to as much as 30% higher sales compared to the year-ago quarter. Moreover, with most investors expecting just $275 million in revenue for the quarter, AMN looks to be accelerating its growth trajectory to take advantage of favorable conditions.
AMN Healthcare's stock has already appreciated sharply, so investors shouldn't necessarily expect huge positive responses to its latest news. Nevertheless, for the long run, AMN appears to be poised to keep reaping rewards in the evolving healthcare industry with an eye toward making itself a one-stop shop for healthcare providers of all sorts.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.