Can Lower Expenses Save Pediatrix Medical's Q1 Earnings?

Physician services provider Pediatrix Medical Group, Inc. MD is set to report its first-quarter 2025 results on May 6, 2025, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at 25 cents per share and $454.5 million, respectively. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The earnings estimate for the to-be-reported quarter has remained stable over the past 60 days. The bottom-line projection indicates a year-over-year increase of 25%. However, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year decrease of 8.2%.

For 2025, the Zacks Consensus Estimate for Pediatrix Medical’s revenues is pegged at $1.9 billion, implying a decline of 6.6% year over year. Yet, the consensus mark for current year EPS is pegged at $1.55, implying growth of 2.7% on a year-over-year basis.

Pediatrix Medical beat the consensus estimate for earnings in each of the trailing four quarters, with the average surprise being 19.4%, as you can see below.

Pediatrix Medical Group, Inc. Price and EPS Surprise

Pediatrix Medical Group, Inc. price-eps-surprise | Pediatrix Medical Group, Inc. Quote

Pediatrix Medical’s Q1 Earnings Whispers

However, our proven model does not conclusively predict an earnings beat for MD this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.

MDhas an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Let’s see how things have shaped up before the first-quarter earnings announcement.

Q1 Factors to Note for Pediatrix Medical

Both the Zacks Consensus Estimate and our model estimate for first-quarter net patient service revenue indicate a 7.6% year-over-year decline. Moreover, both the consensus mark and our model estimate for hospital contract administrative fees predict a 10.7% decline from a year ago. These are likely to have affected the company’s top line in the first quarter.

The Zacks Consensus Estimate for same-facility revenue growth is pegged at 0.75% for the first quarter, as the same-facility patient volume growth is pegged at 0% and same-facility net reimbursement growth is pegged at 0.75%. The consensus mark for same-facility NICU patient days growth is pegged at 1.9%.

Our model estimate for total operating expenses predicts a more than 10% year-over-year decline. Lower practice salaries & benefits, practice supplies & other expenses, and G&A costs are likely to have aided its bottom line.

Our model estimate for first-quarter interest expense is pegged at $8 million, indicating a continued year-over-year decline in the metric. We expect Pediatrix Medical’s first-quarter adjusted net income to be nearly $21 million, a significant jump from the year-ago period.

How Did Other Stocks Perform?

Here are some stocks in the broader Medical space that have already reported earnings for this quarter: HCA Healthcare, Inc. HCA, Encompass Health Corporation EHC and Tenet Healthcare Corporation THC.

HCA Healthcare reported first-quarter 2025 adjusted EPS of $6.45, which outpaced the Zacks Consensus Estimate of $5.77 on the back of higher patient volumes, which led to an increased number of inpatient surgeries, emergency room visits and same-facility emergency room visits. However, the upside was partly offset by elevated salaries and benefits expenses and other operating expenses.

Encompass Health reported first-quarter 2025 adjusted EPS of $1.37, which outpaced the Zacks Consensus Estimate by 15.1%, aided by strong net patient revenue per discharge and capacity expansion measures. However, the upside was partly offset by an elevated operating expense level due to increased salaries, benefits and other operating costs.

Tenet Healthcare reported first-quarter 2025 adjusted EPS of $4.36, which outpaced the Zacks Consensus Estimate by 40.2% thanks to strong same-hospital admissions, higher net revenue per case, a favorable payer mix, and disciplined expense management efforts. Growth in the Ambulatory Care segment was further supported by facility buyouts and expanded service lines. However, the upside was partly offset by a sharp rise in total operating costs.

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This article originally published on Zacks Investment Research (zacks.com).

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