The Providence Service Corporation (PRSC) announced today that it expects record earnings for its second quarter, which the company will release during the week of Aug 9.

The news helped shares gain approximately 4% on another tough day for the market. Due to the difficult environment today, the advance is enough for PRSC to reach the Zacks #1 Rank Top Performers List on Tuesday.

PRSC, through owned and managed entities, provides home and community-based social services and non-emergency transportation services management to government-sponsored clients under programs such as welfare, juvenile justice, Medicaid and corrections.

Q2 EPS to Rise 33% … At Least

Thanks to improved operating results in April and May, PRSC now expects earnings per share of at least 36 cents in the second quarter, which is more than 30% better than the year-ago result of 27 cents.

The new guidance is currently 2 cents shy of the consensus at 38 cents, but offers a good shot of matching or beating expectations in August – especially if that guidance is conservative, as “at least” suggests.

“The payer environment continues to stabilize, Medicaid enrollment is increasing, and the benefits of recent cost-cutting programs continued to enhance our results in the second quarter,” said Chairman and CEO Fletcher McCusker.

Earnings Estimates Waiting for Results?

PRSC was last featured as a Zacks #1 Rank Top Performer on May 12; shortly after its first-quarter report. Earnings estimates haven’t changed much in the past several weeks, but remain above levels from 2 months ago by 49% for this year.

Meanwhile, in that time, expectations for next year have jumped 41% to $1.48, which is currently 13% ahead of this year’s estimate at $1.31.

Even the 38 cents expected for its second quarter has gained in the last 2 months, moving more than 58% from 24 cents.

A Lot to Live Up To

PRSC’s first-quarter performance, announced on May 6, was very solid, and not only sparked higher earnings estimates, but also gave the company its second shot on the top performers list in 3 weeks.

Revenue in the quarter grew 7.5% year over year to $186.7 million from $173.7 million. Revenue for the social services segment and non-emergency transportation services business gained 9.1% and 6.2%, respectively.

Excluding items, earnings per share reached 58 cents, which handily eclipsed the year-ago result of 29 cents while also bettering the consensus by more than 93%.

The company has now beaten Wall Street’s earnings estimates in 3 out of the last 4 quarters.

A Broad Industry

PRSC is part of the Business Services industry, which encompasses a wide array of companies. On today’s 222-stock Zacks #1 Rank List, there are 5 other companies from this space, including Iron Mountain (IRM) and Visa (V).

Zacks Investment Research

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