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Universal Health (UHS) Q1 Earnings Miss Mark, Tumble Y/Y

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Universal Health Services, Inc. (UHS - Free Report) reported first-quarter 2022 adjusted earnings of $2.15 per share, which missed the Zacks Consensus Estimate of $2.47 by 13%. The bottom line decreased 11.9% year over year.

Results were hurt by escalating expenses and lower admissions in its Behavioral Health Care Services segment. However, the same was partly offset by better revenues.

Quarterly Operational Update

Net revenues of $3.29 billion improved 9.3% year over year. The top line beat the consensus mark by 2.2%.

Total operating costs rose 12.6% year over year to $3 billion in the first quarter, mainly due to increased salaries, wages and benefits, other operating expenses, supplies expense, depreciation and amortization.

Segmental Update

Acute Care Hospital Services

On same facility basis, adjusted patient days increased 5.5% year over year in the first quarter. Net revenues improved 9.7% year over year in the quarter on same facility basis from UHS’s acute care services.

Behavioral Health Care Services

In the quarter under review, adjusted patient days on same facility basis slid 1.3% year over year. Net revenues drawn from Universal Health’s behavioral health care services inched up 3.8% year over year.

Financial Update (as of Mar 31, 2022)

Universal Health exited the first quarter with cash and cash equivalents of $105.9 million, down 8.1% from the level at 2021 end.

UHS had $736 million of aggregate available borrowing capacity pursuant to its $1.2-billion revolving credit facility, net of outstanding borrowings and letters of credit at the end of first-quarter 2022.

Total assets of $13.1 billion were up 0.4% from the figure as of Dec 31, 2021.
UHS’s long-term debt totaled $4.25 billion, which increased 2.6% from the 2021-end level.

During the three months of 2022, net cash provided by operating activities of $445 million compares favorably with $72 million reported in the year-ago comparable period.

This was mainly on the back of a favorable change resulting from Medicare-accelerated payments received in 2020 and repaid in first-quarter 2021, an unfavorable change in accounts receivable, an unfavorable change from a decline in net income and depreciation and amortization expense, stock-based compensation expense and gain/loss on sales of assets and businesses along with other combined net unfavorable changes.

Share Repurchase Update

In the first quarter, Universal Health bought back 2.65 million shares worth $350.2 million.

In February, management hiked its share repurchase plan by $1.4 billion.
As of Mar 31, 2021, UHS had an aggregate stock buyback plan of $1.41 billion.


Universal Health reaffirmed its previously issued 2022 operating result forecast.

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.

Stocks to Consider

Here are some stocks worth considering from the medical sector with the perfect mix of elements to surpass estimates in their upcoming releases:

Acadia Healthcare Company, Inc. (ACHC - Free Report) provides behavioral health care services in the United States and the United Kingdom. ACHC
has an Earnings ESP of +0.95% and a Zacks Rank of 3, currently. ACHC will report March-quarter results on May 5. You can uncover the best stocks to buy or sell before they’re reported with our  Earnings ESP Filter.

Brookdale Senior Living Inc. (BKD - Free Report) is a leading owner and operator of senior-living facilities throughout the United States. BKD holds a Zacks Rank of 3 at present. BKD has an Earnings ESP of +8.76% and will report first-quarter earnings on May 5.

AbbVie Inc. (ABBV - Free Report) became one of the top-most pharma companies after acquiring Botox maker Allergan in a cash-and-stock deal for $63 billion in May 2020. ABBV is currently Zacks #3 Ranked and has an Earnings ESP of +0.18%. ABBV will report first-quarter earnings results on Apr 29.