Chemed Corporation: How Is The Management Tackling Roto-Rooter Challenges & Other Risks?

Chemed Corporation’s third-quarter 2024 earnings present a mixed performance across its two primary business segments: VITAS Healthcare and Roto-Rooter. The company reports strong performance from VITAS, while Roto-Rooter is facing challenges. VITAS Healthcare displayed robust growth in the quarter, primarily driven by increased admissions and the successful acquisition of Covenant Health. Admissions rose by 6.3% year-over-year, with the average daily census up 15.5%, primarily due to the acquisition. Revenue increased by 17.3%, totaling $391.4 million, and was supported by a Medicare reimbursement rate increase of approximately 2.6%. The revenue per patient day also increased slightly by 1.39% to $199.16. The adjusted EBITDA for VITAS, excluding Medicare Cap, increased by 33.1%, suggesting operational efficiency and strong market demand. Despite apprehensions over hurricane impacts in Florida, VITAS demonstrated resilience and minimal disruption, and integration of the Covenant acquisition is reportedly on target. This segment is projected to continue growing with the recent opening of a program in Pasco County, Florida, suggesting solid future prospects.