Chemed Corporation reported its financial results for the first quarter of 2026, revealing a consolidated service revenue of $657.5 million, a 1.6% increase from $646.9 million in the same period last year. The net income for the quarter was $66.3 million, translating to earnings per share of $4.84, compared to $71.8 million and $4.91 per share in the prior year. The increase in revenue was primarily driven by a 3.1% rise in service revenues at VITAS, the company's hospice care segment, which was partially offset by a 0.9% decline in revenues from Roto-Rooter, its plumbing and drain cleaning subsidiary.
The financial performance reflects significant changes compared to the previous fiscal period, particularly in the VITAS segment, which saw a $12.6 million increase in revenue attributed to a 2.2% rise in days-of-care and a 2.6% increase in Medicare reimbursement rates. However, the revenue growth was negatively impacted by a shift in acuity mix and contra revenue adjustments, which collectively reduced growth by 1.67%. In contrast, Roto-Rooter experienced a decrease in both commercial and residential revenues, with a notable 1.9% drop in commercial revenue.
Operationally, Chemed made strategic moves, including two acquisitions by Roto-Rooter, which added $20.6 million in goodwill. The company also reported a significant increase in accounts receivable, up $32.9 million, primarily due to the timing of payments from the Federal government for hospice services. Additionally, the company’s long-term debt rose to $91.2 million, largely due to acquisitions and stock repurchases, which totaled $197.7 million in the quarter.
In terms of employee metrics, Chemed's workforce remains critical to its operations, with the majority of its services provided through a network of employees across the United States. The company continues to monitor macroeconomic conditions, including inflation and potential tariff impacts, which may affect future profitability. Despite these challenges, management anticipates that operating income and cash flows will be sufficient to meet business commitments in the foreseeable future.
Looking ahead, Chemed's management remains optimistic about its operational strategies and market positioning. The company plans to continue evaluating cash utilization alternatives, including share repurchases and potential acquisitions, to enhance shareholder value. The outlook for the remainder of 2026 suggests a cautious but steady approach to navigating the evolving market landscape while maintaining compliance with financial covenants under its new credit agreement.
About CHEMED CORP
Chemed Corporation operates through two primary segments: VITAS, a leading provider of hospice and palliative care services primarily reimbursed by Medicare and Medicaid, and Roto-Rooter, a well-known plumbing, drain cleaning, excavation, and water restoration service provider serving residential and commercial customers across the U.S. Chemed’s decentralized business model emphasizes quality service delivery, strong brand recognition, and regulatory compliance in highly competitive healthcare and home services markets.
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