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Investing.com -- Chemed Corporation (NYSE:CHE) reported second-quarter earnings that significantly missed analyst expectations, sending shares down 4.9% as the healthcare and plumbing services provider also cut its full-year outlook.
The company, which operates VITAS Healthcare and Roto-Rooter, posted adjusted earnings per share of $4.27 for the quarter ended June 30, 2025, falling well below the analyst estimate of $5.39. Revenue came in at $618.8 million, up 3.8% YoY but short of the $650.6 million consensus estimate.
Chemed lowered its full-year 2025 earnings guidance to between $22.00 and $22.30 per share, down from its previous forecast of $24.95 to $25.45 and below analyst expectations of $23.29. The company cited Medicare Cap billing limitations at its VITAS hospice segment as a key factor in the reduced outlook.
"Nick has evolved, transformed and cultivated the organization to be well positioned for the future and has elevated VITAS’ leadership in the industry over the last thirteen years," said Kevin J. McNamara, Chemed’s Chief Executive Officer, commenting on the departure of Nicholas Westfall, Executive Vice President of Chemed and CEO of VITAS.
VITAS, the company’s hospice care segment, saw revenue increase 5.8% to $396.2 million, driven by a 6.1% increase in average daily census. However, the segment faced challenges with Medicare Cap billing limitations of $16.4 million in the quarter, compared to just $1.4 million in the same period last year.
Roto-Rooter’s revenue grew marginally by 0.6% to $222.6 million, with commercial revenue up 4.4% while residential services showed mixed results. The segment’s adjusted EBITDA fell 18.7% to $48.6 million, with margins declining 517 basis points to 21.8%.
As of June 30, 2025, Chemed had $249.9 million in cash and no debt. The company repurchased 75,000 shares during the quarter at an average cost of $572.61 per share.
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