Encompass Health Shares Rise 5% as Q3 Results Beat Estimates and Guidance is Upgraded

BIRMINGHAM, Ala. - Shares of Encompass Health Corporation (NYSE:EHC), the operator of inpatient rehabilitation hospitals, rose over 5% in after-hours trading on Monday following the company's announcement of third-quarter results that exceeded analyst expectations and an upward revision of its year-end outlook.
The company reported adjusted earnings per share of $1.03, surpassing the consensus estimate of $0.94. Revenue was $1.35 billion, exceeding analysts' expectations of $1.33 billion, and increased by 11.9% compared to the same period last year.
Encompass Health cited a solid discharge increase of 8.8% (including a same-store growth of 6.8%) as the primary driver of revenue growth. Net income per discharge also grew by 2.5% year-over-year.
President and CEO Mark Tarr stated, "We are very pleased with our third-quarter performance, driven by strong discharge growth resulting in an 11.9% increase in revenue and a 13.4% increase in Adjusted EBITDA."
Looking ahead, the company raised its full-year guidance for 2024. Encompass Health now expects adjusted earnings per share to be between $4.19 and $4.33, higher than its previous forecast of $3.97 to $4.22 and the consensus estimate of $4.19. The company also raised its revenue forecast from a range of $5.275 billion to $5.350 billion to a range of $5.325 billion to $5.375 billion.
The enhanced outlook indicates ongoing momentum in patient volumes and pricing power in Encompass Health's inpatient rehabilitation services.