Providers of workforce solutions to hospitals, AMN Healthcare Services ( NYSE: AMN ) and Cross-Country Healthcare ( CCRN ), have lost sharply in the morning hours Friday after HCA Healthcare ( HCA ) noted an improving labor market outlook in the industry.
Despite a slight deceleration in 1Q 2022, AMN ( AMN ) and Cross Country ( CCRN ) more than doubled its revenue in 4Q 2021 as the two rivals moved to serve clients impacted by the COVID-19 related staffing challenges.
However, during the 2Q 2022 earnings call on Friday, HCA ( HCA ) Chief Executive Samuel Hazen indicated signs of easing labor pressure. According to Hazen, compared to the first quarter this year, HCA’s ( HCA ) second quarter labor turnover has dropped 20%, while hiring has surged 18%.
“So these metrics early successes, if you will, give us some promise that the combination of our compensation strategies, our retention strategy and then the mix of our labor workforce should improve as we move through the balance of the year,” he added.
With signs of pressure on revenue, Cross Country ( CCRN ) has lost ~16% to record the sharpest intraday loss since Mar. 2020, while AMN ( AMN ) has plunged ~11%, the biggest one day drop since Nov. 2021.
In a bullish thesis on AMN ( AMN ), Seeking Alpha contributor David J. Waldron argues that the company is likely to sustain the pandemic-driven uptick in staffing demand as the baby-boom population ages.
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AMN, Cross Country slip as HCA points to improving labor outlook