Ensign CEO Says Florida Buildings Are 'Very, Very Challenged' As Company Lifts 2026 Earnings Outlook
Management raised 2026 earnings guidance to $7.94 to $8.02 a share while warning new turnaround operations are slow to contribute.
Ensign Group CEO Barry Port said on the company's third-quarter earnings call Wednesday that its new Florida buildings are "very, very challenged" and typically take "a year or more" to add to revenue and earnings, even as management lifted its 2026 earnings guidance to $7.94 to $8.02 per diluted share.
Port on slow-paying turnarounds
Ensign, a holding company whose independent subsidiaries run skilled nursing and senior living facilities, added 22 operations during and after the quarter, including nine in Florida, its first in the state, plus seven in Colorado, four in Washington and two in Texas.
Asked by a Truist analyst about the pace of recent acquisitions, Port said the question "plays into maybe some of the kind of misprojections on revenue from some of the analysts and others that are following us." He said many mid-sized portfolios Ensign took in California and other states were less troubled than the ones it is buying now, which he called "more of our bread and butter, kind of our typical turnaround type operations."
The Texas buildings are "still not accretive," Port said, though "possibly in the fourth quarter" they could contribute. The Florida operations, like Texas, are "very, very challenged" clinically, financially and in physical plant, he said. For turnarounds like these, he said, it normally takes "a year or more" to contribute to revenue and earnings.
Guidance up, core business steady
Management raised 2026 earnings guidance from $7.75 to $7.85 per diluted share and lifted the low end of revenue guidance to $5.89 billion, keeping the top at $5.92 billion. Port said the midpoint of the earnings range is a 21.5% increase over 2025.
Chief Financial Officer Suzanne Snapper told the Truist analyst the core business should stay strong in the fourth quarter, pointing to same-store occupancy of 84% and a step-up built into guidance.
Third-quarter revenue was $1.48 billion, up 14.5%, and adjusted earnings were $2.03 a share. Revenue came in about 0.71% below the Zacks consensus estimate, according to a Zacks report.
Why Florida, and what it costs
Chief Investment Officer Chad Keetch said the Florida operations are almost all at lower-than-average occupancy for their areas and present substantial clinical and operational challenges. Port cited a busy litigation environment as the long-standing deterrent to entering the state, but called the rate environment stable and the labor market good.
Ensign spent more than $675 million on growth in the first nine months of 2026, Snapper said, and net debt to adjusted EBITDA was about two times after those investments. Keetch said 50 to 60 acquisitions a year is "totally doable, if not more."
Whether the Texas buildings begin contributing in the fourth quarter, as Port said was possible, will be the first test of his timeline.
Sources
- Compared to Estimates, Ensign Group (ENSG) Q3 Earnings: A Look at Key Metrics — Yahoo Finance
- Ensign Non-GAAP EPS of $2.03 beats by $0.06, revenue of $1.48B misses by $30M (NASDAQ:ENSG) — seekingalpha.com
- The Ensign Group Reports Third Quarter 2026 Results; Raises — globenewswire.com
- INVESTOR ALERT: Pomerantz Law Firm Reminds Investors with — globenewswire.com
