AMN Healthcare Services Inc. (NYSE: AMN) and Cross Country Healthcare Inc. (NASDAQ: CCRN) recently issued quarterly earnings reports and while both firms posted revenue increases, optimism is tempered by concerns about Covid-19’s impact going forward.
AMN’s revenue up but demand for travel nurses now reflects decline in crisis assignments
AMN reported first-quarter revenue rose 13.2% but was up 3% on an organic basis. The healthcare staffing firm reported travel nurse demand was strong in the second half of March and much of April; however, demand has since fallen significantly reflecting a decline in crisis assignments.
AMN also noted that all divisions — except travel nurse and VMS — were negatively impacted in the first quarter as the Covid-19 crisis prompted a nationwide reduction in elective procedures and overall healthcare utilization. The reductions started in the second half of March.
Click on charts to enlarge.
AMN realigned its reporting segments. Its new “nurse and allied solutions” segment also includes the company’s revenue cycle solutions business that provides “skilled labor solutions for remote medical coding, clinical documentation improvement, case management, and clinical data registry, and also provides auditing and advisory service.”
The company’s “technology and workforce solutions” segment includes remote video interpreting, vendor management solutions, predictive analytics, RPO and credentialing services. The third segment is “physician and leadership solutions.”
Revenue by segment
The company noted that nurse and allied solutions revenue was up 3% on an organic basis. Nurse division revenue was up 6% organically and allied division revenue was up 5% organically.
Technology and workforce solutions revenue was driven by AMN’s acquisitions of b4health and Stratus Video. On an organic basis, revenue in this division was up 13%.
AMN forecast second-quarter revenue of between $550 million and $570 million, a year-over-year increase of between 2.8% and 6.5%.
Cross Country reports revenue up, but cites volatility in market as initial crisis demand tapers off
Cross Country reported first-quarter revenue rose 7.6% with growth across its segments. However, the Boca Raton, Florida-based healthcare staffing firm said it was not issuing guidance for the second quarter and demand for services remains volatile. Orders initially surged because of the Covid-19 crisis but have since trended downward.
While the crisis has prompted increases in some business, some facilities are canceling non-pandemic assignments because of low patient census and deferred elective procedures. The company has also seen declines in its education business that are being partially offset by demand for teletherapy services.
Reported restructuring costs of $564,000 in the first quarter compared to $1.1 million in the same quarter last year.
Revenue by segment
Cross Country’s board approved a request by co-founder and CEO Kevin Clark that his base pay be reduced by 10%; independent board members’ cash compensation will be reduced by 10% as well.
