Healthcare Services Group (HCSG) Misses Q1 EPS by 24c, Revenues Miss; Raises Cash Dividend

Healthcare Services Group (NASDAQ: HCSG) reported Q1 EPS of $0.12, $0.24 worse than the analyst estimate of $0.36. Revenue for the quarter came in at $476 million versus the consensus estimate of $489.79 million.

CEO Comments

Ted Wahl, Chief Executive Officer, stated, “This past quarter was eventful yet very productive. Eventful in that the industry continued to work through a challenging cycle that has negatively impacted some of our customers, leading in some cases to restructurings or payment issues that required us to increase AR reserves, which impacts reported earnings, or reduce services, which creates a temporary step down in revenue growth. We saw some of these dynamics playout in Q1 and Q4 of last year as well. Productive in that our management team and field based leaders demonstrated expertise and capability in proactively managing these difficult situations, as well as innovation in identifying solutions to set the Company up for future success, a prime example being the increased payment frequency initiative.”

Mr. Wahl also noted that industry fundamentals are “showing early signs of improvement,” adding that in 2020, the Company “expects to return to its historical growth profile.”

Mr. Wahl concluded, “Our longer term outlook, over the next three to five years, is very positive, as the opportunity for continued expansion is as great as it’s ever been. The demand for our services remains strong and there’s plenty of white space to more than support the next decades worth of growth, with over 23,000 facilities in our target market, and presently less than 18% of those facilities outsourcing housekeeping and less than 8% outsourcing dining.”

For earnings history and earnings-related data on Healthcare Services Group (HCSG) click here.

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