Encompass Health Posts Earnings of $1.52 per Share and Raises 2026 Guidance
Key Facts
Encompass Health reported adjusted earnings of $1.52 per share in the third quarter of 2026, topping analysts’ estimate of $1.36, according to the company’s published results. Net operating revenue was $1.6095 billion, compared with consensus of $1.60 billion, according to market estimates cited by StreetInsider. Year over year, operating revenue rose 8.9% from $1.4775 billion in the third quarter of 2025. Adjusted earnings per share increased 23.6% from $1.23 in the year-earlier period. The results came with an increase in the company’s 2026 financial outlook, including operating revenue, adjusted EBITDA and adjusted earnings per share.
Adjusted EBITDA was $346.6 million in the third quarter, compared with $300.1 million a year earlier, an annual increase of 15.5%, according to company data. Chief Executive Mark Tarr said quarterly revenue rose 8.9% and adjusted EBITDA grew 15.5%. The comparison shows adjusted EBITDA growing faster than revenue over the same period. In the second quarter, the company reported net operating revenue of $1.5974 billion, up 9.6% year over year. Adjusted earnings per share in that quarter were $1.55, an increase of 10.7% from a year earlier, while adjusted EBITDA reached $348 million, up 9.2%.
Hospital activity increased in the third quarter, with the company recording 69,605 discharges, up 5.7% from the year-earlier period. Discharges at same-hospital facilities grew 3.0%, according to the company’s results. Net patient revenue per discharge also rose to $22,543 from $21,679 a year earlier, an annual increase of 4.0%. The increase in both discharges and revenue per discharge coincided with 8.9% growth in operating revenue during the quarter. In the first nine months of 2026, the company opened four hospitals with 189 beds and added 85 beds to existing hospitals.
Encompass Health raised its 2026 guidance range, forecasting operating revenue of $6.45 billion to $6.50 billion, compared with a previous range of $6.410 billion to $6.490 billion. Its adjusted EBITDA outlook rose to $1.395 billion to $1.415 billion, from $1.365 billion to $1.395 billion. The company now expects adjusted earnings per share of $6.23 to $6.37, versus its previous forecast of $6.02 to $6.25. The revisions raise the low and high ends of the revenue and earnings outlooks, and the high end of the adjusted EBITDA outlook. The quarterly results and revised guidance provide the company’s stated indicators of expected performance for the rest of the fiscal year.
After its second-quarter results, the company said it had opened three hospitals with 139 beds in the first half of 2026. At the time, it expected to open five additional hospitals and add more than 100 beds to existing facilities before year-end. Results for the first nine months showed four hospital openings with a total of 189 beds and 85 beds added to existing hospitals. On July 23, 2026, the board also raised its authorization for repurchases of common stock to $1 billion. The company’s shares, listed under the ticker EHC, closed at $121.53 on October 27, 2026, according to EL7 data. The company scheduled a call to discuss third-quarter results for 10:00 a.m. Eastern time on Thursday, October 29, 2026.