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Universal Health (UHS) Q4 Earnings Beat, Revenues Up Y/Y
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Universal Health Services, Inc. (UHS - Free Report) reported fourth-quarter 2020 adjusted earnings of $3.59 per share, which surpassed the Zacks Consensus Estimate by 24.7%. Further, the bottom line improved 28.7% year over year.
The company’s results reflect higher revenues, partly offset by escalating costs.
While adjusted admissions on a same facility basis at the company’s acute care hospital services segment declined 14.5% year over year in the fourth quarter, the same for behavioral health care services segment slumped 9.2% year over year. Shares of Universal Health have lost 7.1% on Feb 26.
Quarterly Operational Update
Net revenues improved 6.6% year over year to $3.1 billion primarily attributable to higher revenues reported across the company’s acute care and behavioural health care facilities. Also, the company’s top line outpaced the Zacks Consensus Estimate by 4.1%.
Total operating expenses of $2.7 billion in the fourth quarter increased 4.6% year over year due to rise in salaries, wages and benefits, other operating expenses, supplies expense, depreciation and amortization, and lease and rental expense.
Universal Health Services, Inc. Price, Consensus and EPS Surprise
In the quarter under review, adjusted patient days on same facility basis slid 2.2% from the prior-year quarter. Net revenues (on a same facility basis), including the favorable impact of the CARES Act and other grant revenues, improved 9.5% year over year.
Behavioral Health Care Services
On same facility basis, adjusted patient days were down 5.9% year over year. Net revenues improved 3% year over year during the quarter on same facility basis including the positive impact of the CARES Act and other grant revenues.
Financial Update
As of Dec 31, 2020, the company had cash and cash equivalents of $1.2 billion, which increased to nearly 20-fold from 2019 end.
Total assets were $13.5 billion as of Dec 31, 2020, which grew 15.5% from the figure as of 2019 end.
The company’s long-term debt was $3.5 billion, down 9.6% from the figure as of Dec 31, 2019.
During 2020, net cash provided by operating activities totaled $2.3 billion, which surged 64.1% year over year. This can primarily be attributed to a favorable change from the Medicare accelerated payments, a positive change from the payment deferral of the employer's share of Social Security taxes, a positive change in accrued insurance expense and a favorable change in accrued and deferred income taxes, etc.
Share Repurchase and Dividend Update
Universal Health boasts of a strong share buyback history. Case in point till Dec 31, 2020, the company has bought back roughly 18.02 million shares worth around $2.14 billion since 2014. Due to the COVID-19 pandemic induced market volatilities, the company had temporarily suspended its share buyback activities and quarterly dividend payments in April 2020.
Once approved by the board of directors, the company intends to recommence share buybacks in second-quarter 2021. Recently, its board of directors have also approved a quarterly dividend of 20 cents per share, which will be paid on Mar 31, 2021 to shareholders of record as of March 15.
Full-Year Update
During 2020, the company’s adjusted net income came in at $11.12 per share, which improved 11.3% year over year.
Net revenues for the year rose 1.6% year over year to $11.6 billion.
2021 Projections
Following the company’s fourth-quarter results, Universal Health issued its outlook for 2021.
Net revenues for the current year are anticipated between $12.13 billion and $12.36 billion.
Adjusted EPS-diluted per share is anticipated to be $10.05-$11.05.
Management expects capital expenditures between $850 million and $1 billion. The company projects interest expense of $93.5 million for 2021.
Of the medical sector players that reported fourth-quarter results so far, the bottom line of Tenet Healthcare Corporation (THC - Free Report) , HCA Healthcare, Inc. (HCA - Free Report) and Humana Inc. (HUM - Free Report) beat the Zacks Consensus Estimate.
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In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
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Universal Health (UHS) Q4 Earnings Beat, Revenues Up Y/Y
Universal Health Services, Inc. (UHS - Free Report) reported fourth-quarter 2020 adjusted earnings of $3.59 per share, which surpassed the Zacks Consensus Estimate by 24.7%. Further, the bottom line improved 28.7% year over year.
The company’s results reflect higher revenues, partly offset by escalating costs.
While adjusted admissions on a same facility basis at the company’s acute care hospital services segment declined 14.5% year over year in the fourth quarter, the same for behavioral health care services segment slumped 9.2% year over year. Shares of Universal Health have lost 7.1% on Feb 26.
Quarterly Operational Update
Net revenues improved 6.6% year over year to $3.1 billion primarily attributable to higher revenues reported across the company’s acute care and behavioural health care facilities. Also, the company’s top line outpaced the Zacks Consensus Estimate by 4.1%.
Total operating expenses of $2.7 billion in the fourth quarter increased 4.6% year over year due to rise in salaries, wages and benefits, other operating expenses, supplies expense, depreciation and amortization, and lease and rental expense.
Universal Health Services, Inc. Price, Consensus and EPS Surprise
Universal Health Services, Inc. price-consensus-eps-surprise-chart | Universal Health Services, Inc. Quote
Segment Update
Acute Care Hospital Services
In the quarter under review, adjusted patient days on same facility basis slid 2.2% from the prior-year quarter. Net revenues (on a same facility basis), including the favorable impact of the CARES Act and other grant revenues, improved 9.5% year over year.
Behavioral Health Care Services
On same facility basis, adjusted patient days were down 5.9% year over year. Net revenues improved 3% year over year during the quarter on same facility basis including the positive impact of the CARES Act and other grant revenues.
Financial Update
As of Dec 31, 2020, the company had cash and cash equivalents of $1.2 billion, which increased to nearly 20-fold from 2019 end.
Total assets were $13.5 billion as of Dec 31, 2020, which grew 15.5% from the figure as of 2019 end.
The company’s long-term debt was $3.5 billion, down 9.6% from the figure as of Dec 31, 2019.
During 2020, net cash provided by operating activities totaled $2.3 billion, which surged 64.1% year over year. This can primarily be attributed to a favorable change from the Medicare accelerated payments, a positive change from the payment deferral of the employer's share of Social Security taxes, a positive change in accrued insurance expense and a favorable change in accrued and deferred income taxes, etc.
Share Repurchase and Dividend Update
Universal Health boasts of a strong share buyback history. Case in point till Dec 31, 2020, the company has bought back roughly 18.02 million shares worth around $2.14 billion since 2014. Due to the COVID-19 pandemic induced market volatilities, the company had temporarily suspended its share buyback activities and quarterly dividend payments in April 2020.
Once approved by the board of directors, the company intends to recommence share buybacks in second-quarter 2021. Recently, its board of directors have also approved a quarterly dividend of 20 cents per share, which will be paid on Mar 31, 2021 to shareholders of record as of March 15.
Full-Year Update
During 2020, the company’s adjusted net income came in at $11.12 per share, which improved 11.3% year over year.
Net revenues for the year rose 1.6% year over year to $11.6 billion.
2021 Projections
Following the company’s fourth-quarter results, Universal Health issued its outlook for 2021.
Net revenues for the current year are anticipated between $12.13 billion and $12.36 billion.
Adjusted EPS-diluted per share is anticipated to be $10.05-$11.05.
Management expects capital expenditures between $850 million and $1 billion. The company projects interest expense of $93.5 million for 2021.
Zacks Rank
Universal Health currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the medical sector players that reported fourth-quarter results so far, the bottom line of Tenet Healthcare Corporation (THC - Free Report) , HCA Healthcare, Inc. (HCA - Free Report) and Humana Inc. (HUM - Free Report) beat the Zacks Consensus Estimate.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>