Chemed Corporation reported first‑quarter 2026 results that surpassed expectations, with revenue of $657.5 million and an adjusted diluted earnings per share of $5.65, a beat of roughly $0.31 over the consensus estimate of $5.34–$5.36. The earnings beat was driven by a 1.6% year‑over‑year revenue increase and a modest 0.6% rise in adjusted EBITDA for the VITAS hospice segment, offsetting a 9.6% decline in Roto‑Rooter’s adjusted EBITDA.
The hospice arm, VITAS, posted a 6.9% rise in total admissions, which helped lift revenue and maintain a healthy gross margin. The company accrued $2.4 million in Medicare Cap billing limitation, while no limitation was recorded for its Florida program, underscoring the effectiveness of its patient‑mix strategy. In contrast, Roto‑Rooter’s revenue fell 0.9% and its gross margin remained at 51.0%, reflecting increased internet‑marketing costs and weather‑related service disruptions that compressed the segment’s profitability.
Adjusted EBITDA for the quarter rose 0.6% in VITAS, driven by higher admissions and favorable reimbursement rates, while Roto‑Rooter’s margin compression was largely attributable to higher marketing spend and seasonal weather impacts. The company’s overall operating performance remained solid, with a consolidated adjusted EBITDA margin that reflected the balance between the two segments.
Chemed raised its full‑year adjusted EPS guidance to $24.00–$24.75 per share, up from the prior $23.25–$24.25 range. The guidance increase signals management’s confidence in continued operational improvements and a favorable outlook for both hospice and plumbing businesses, positioning the company for double‑digit earnings growth in 2026. The midpoint of the revised guidance represents a 13% increase over 2025 adjusted EPS of $21.55.
Analysts welcomed the results, noting that the strong VITAS performance and the guidance raise were key drivers of the positive market reaction. The company’s aggressive share‑repurchase program, which bought back 500,000 shares for $197.7 million in the quarter, further underscored management’s confidence in the business’s long‑term value.
Chemed’s long‑term strategy includes a potential divestiture of the Roto‑Rooter plumbing business, a move that could streamline operations and focus resources on the high‑margin hospice segment. The company’s continued capital allocation through share repurchases and its ability to raise guidance amid a challenging plumbing environment suggest a resilient business model and a clear path to sustained growth.
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