Source: AMN Healthcare Services.

Unemployment was a big problem in the recession of 2008, but one area that never felt the pinch as badly as most of the economy was the healthcare industry. With ongoing challenges in finding professionals to staff their facilities, hospitals and other healthcare providers routinely turn to AMN Healthcare Services (NYSE:AMN), and coming into its second-quarter financial report, AMN Healthcare investors expected that the huge gains that the stock had already posted would continue to reflect the success of the company in growing its business. For its part, AMN kept up its streak of solid results, with a report that send the stock to new all-time record highs. Let's take a closer look at AMN Healthcare to see how it keeps performing so well.

AMN gets another healthy outlook
AMN Healthcare's second-quarter results were just the latest in a long line of favorable performance from the healthcare-staffing provider. Sales climbed 40% to $350.1 million, with growth accelerating from the first quarter and easily topping the $337 million that most investors were expecting from AMN. Net income performed even better, more than doubling from year-ago levels to $15.9 million and producing adjusted earnings of $0.38 per share, well above the $0.26-per-share consensus forecast among those following the company.

AMN's three major sources of business all showed good gains. The nurse and allied healthcare segment had the strongest sales growth, with gains of nearly 45% that helped produce a better than 60% jump in operating income. The temporary-fill-in locum tenens staffing division grew revenue by 31% as operating profits jumped by half, and physician permanent placement services also saw its bottom-line climb by 50% on a modest 19% rise in revenue.

CEO Susan Salka couldn't say enough good things about AMN's success. "All business segments are executing very strongly amid continued robust market conditions," said Salka, "which drove better than anticipated revenue and profitability growth." Salka also pointed to the success of AMN's acquisition strategy, noting that its "recently acquired Avantas, Onward Healthcare, Locum Leaders, and Medefis companies are also performing very well and the majority of our integration activities have been successfully completed."

Can AMN Healthcare keep climbing?
Looking forward, AMN Healthcare is hopeful that its sales growth will continue to climb sharply. In its guidance, AMN said that third-quarter revenue would fall in a range of $360 million to $365 million, which is at the upper end of the current consensus forecast. Once again, AMN projected that overhead costs would rise slightly as a percentage of revenue, but that turned out not to be the case in the second quarter despite the company's similar projections in its last report.

One key to AMN's ability to capture as much of its market as possible has been its decision to bring on more recruiters. As Salka said in the conference call after the announcement, "We didn't feel as much of a drag [from acquisitions] as you might have thought because we were able to get the benefit of our existing recruiters being more productive [and] Onward [Healthcare] recruiters coming on board and already being very productive and then getting our new recruiters ramped-up very quickly." By being able to work closely with clients, AMN's recruiting staff can not only deliver the professionals a client needs right now but also get to know them better and cross-sell recruitment-outsourcing services and other higher-margin business opportunities.

Still, even the company itself has been surprised by its success. Salka noted that demand simply remains strong, and AMN's team continues to execute extremely well on taking advantage of the prospects in the marketplace right now.

In response, AMN shares have jumped 15% since the report last week, and many believe that the growth trend could have a lot further to run. With demographic shifts continuing to favor the healthcare industry and with skilled medical professionals remaining tough to find, AMN Healthcare is in a great position to continue to profit from its efforts to connect hospitals and medical facilities with the people they need to get their jobs done.