Chemed (NYSE:CHE) Surges After Q1 Beat and Upgraded Full-Year Guidance
Chemed Corp (NYSE:CHE) reported its first-quarter 2026 results on April 23, delivering a clear beat on both the top and bottom lines that sent shares sharply higher in after-market trading. The company’s performance was driven by a quicker-than-expected recovery at its VITAS hospice unit, prompting management to raise its full-year adjusted earnings forecast.
Revenue and Earnings Beat Estimates
For the quarter ended March 31, 2026, Chemed reported consolidated revenue of $657.5 million, a 1.6% increase year-over-year. This came in slightly ahead of the analyst consensus estimate of $656.3 million. On an adjusted diluted earnings-per-share (EPS) basis, the company earned $5.65, which was a significant beat against the $5.36 that analysts had penciled in. This adjusted EPS figure represented a 0.4% increase from the prior year’s first quarter.
On a GAAP basis, diluted EPS came in at $4.84, a minor decrease of 0.4% from $4.86 in the year-ago quarter.
Segment Performance: VITAS Leads, Roto-Rooter Mixed
The earnings report showcased a tale of two very different businesses. VITAS, the nation’s largest hospice provider, was the standout performer. Net patient revenue rose 3.1% to $420.0 million, while admissions surged 6.9% and average daily census (ADC) grew 2.2%. Adjusted EBITDA for VITAS, excluding Medicare Cap limitations, increased 0.6% to $70.8 million.
In contrast, the Roto-Rooter plumbing and drain-cleaning segment experienced headwinds. Revenue dipped 0.9% to $237.5 million, dragged down by a decline in commercial revenue and the impact of severe winter weather that temporarily disrupted operations. Adjusted EBITDA for Roto-Rooter fell 9.6% to $53.5 million.
Aggressive Capital Allocation
During the quarter, Chemed aggressively deployed capital. The company repurchased 500,000 shares of its own stock for $197.7 million, or approximately $395.36 per share. This buyback, combined with strong operational performance, was a key factor in the guidance upgrade. Additionally, Roto-Rooter acquired two franchises in San Francisco and Fort Worth for a combined $20.6 million, a move expected to add $5.0 million to $5.5 million in revenue for the remainder of 2026.
Outlook and Guidance Update
Management took the unusual step of updating its full-year guidance during the first quarter. The decision was driven by the faster-than-expected recovery at VITAS. The company now expects:
- Adjusted Diluted EPS: $24.00 to $24.75, up from the original range of $23.25 to $24.25. The midpoint of this new range implies a 13% increase from 2025’s adjusted EPS of $21.55.
- VITAS Revenue Growth (ex-Medicare Cap): 6.5% to 7.5%, raised from 5.5% to 6.5%.
- VITAS ADC Growth: 4.5% to 5.5%, up from 3.5% to 4.0%.
- Roto-Rooter Revenue Growth: Remains unchanged at 3.0% to 3.5%.
- Roto-Rooter Adj. EBITDA Margin: Lowered to 21.5% to 22.5% due to persistent elevated marketing costs.
While the company did not provide explicit Q2 2026 guidance, the full-year adjusted EPS midpoint of $24.38 is well above the current analyst consensus estimate for the full year of $24.11.
Market Reaction
The market’s reaction was overwhelmingly positive. After the earnings release, Chemed’s stock surged approximately 8.4% in after-market trading. The strong performance of the VITAS segment, which had been under pressure in 2025 due to Medicare Cap issues, combined with the aggressive share buyback and a clear upgrade to the full-year outlook, provided a compelling narrative for investors.
For a deeper dive into Chemed’s historical earnings performance and to view the latest analyst estimates for the upcoming quarter and full year, visit the Chemed earnings page and analyst ratings page.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making any investment decisions.