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HCA Healthcare (HCA) Q4 Earnings Lag on High Costs, Hikes Dividend

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HCA Healthcare, Inc. (HCA - Free Report) reported fourth-quarter 2022 adjusted earnings of $4.64 per share, which missed the Zacks Consensus Estimate by 3.1% and our estimate of $4.88 per share. However, the bottom line advanced 5% year over year.

Revenues of HCA amounted to $15.5 billion, which improved 2.9% year over year in the quarter under review. The top line missed the consensus mark by a whisker but came higher than our estimate of $15.3 billion.

The quarterly results were hit by adversities inflicted by Hurricane Ian on one of HCA Healthcare’s facilities in Florida. The deadly storm resulted in additional expenses and a loss of revenues, anticipated to be $50 million. HCA also suffered from an elevated expense level. Nevertheless, the downside was partly offset by improved patient admissions that contribute a major chunk to the healthcare provider’s top line.

HCA Healthcare, Inc. Price, Consensus and EPS Surprise


HCA Healthcare, Inc. Price, Consensus and EPS Surprise

HCA Healthcare, Inc. price-consensus-eps-surprise-chart | HCA Healthcare, Inc. Quote


Quarterly Details

Same-facility equivalent admissions advanced 5.4% year over year in the fourth quarter, while same-facility admissions grew 2.9% year over year.

However, same-facility revenue per equivalent admission slipped 2.6% year over year in the quarter under review.

While same-facility inpatient surgeries dipped 0.1% year over year, same-facility outpatient surgeries inched up 0.3% year over year. Same-facility emergency room visits rose 11.4% year over year.

Salaries and benefits, supplies and other operating expenses of $12.3 billion increased 3.2% year over year in the fourth quarter and stood higher than our estimate of $12.1 billion.

Adjusted EBITDA of $3.2 billion inched up 1% year over year but matched our estimate.  

HCA Healthcare operated 182 hospitals and roughly 2,300 ambulatory sites of care across 20 states and the U.K. as of Dec 31, 2022.

Financial Update (as of Dec 31, 2022)

HCA Healthcare exited the fourth quarter with cash and cash equivalents of $908 million, which plunged 37.4% from the figure in 2021 end. It had $3.5 billion available under its credit facilities at the fourth-quarter end.

Total assets of $52.4 billion increased 3.3% from the 2021-end figure.

Long-term debt, less debt issuance costs and discounts, escalated 9.8% from the figure at 2021 end to $37.7 billion.

Capital expenditures amounted to $1.3 billion minus acquisitions during the fourth quarter.

Cash Flows

HCA Healthcare generated cash from operations amounting to $8.5 billion in 2022, down 4.9% from the 2021 figure.

Share Repurchase Update

HCA Healthcare bought back shares worth $1.5 billion in the fourth quarter. As of Dec 31, 2022, it had a leftover capacity of $1.6 billion under its buyback authorization. Management also sanctioned a $3 billion increase in its share repurchase program.

Dividend Hike

The Board of Directors approved a hike in the quarterly cash dividend. The increased dividend amounting to 60 cents per share will be paid out on Mar 31, 2023, to its shareholders of record as of Mar 17, 2023.

Full-Year Update

In 2022, HCA Healthcare’s adjusted earnings came in at $16.89 per share, within the management guidance range of $16.40-$17.60. However, the bottom line dropped 3.5% from the 2021 figure. Revenues of $60.2 billion grew 2.5% from the 2021 figure and came within company guidance of $59.5-$61.5 billion. 

Adjusted EBITDA declined 4.6% year over year to $12.1 billion in 2022 but came within the management view of $11.8-$12.4 billion.

2023 View

Annual revenues are projected to lie within $61.5-$63.5 billion, the midpoint of which indicates an improvement of 3.8% from the 2022 reported figure.

Adjusted EBITDA is anticipated between $11.8 billion and $12.4 billion.

Net income attributable to HCA Healthcare is expected to lie between $4.5 billion and $4.9 billion.

Management estimates EPS for 2023 within the $16.40-$17.60 band. The midpoint of the guidance suggests a 0.7% dip from the 2022 figure.

Capital expenditures, excluding acquisitions, is predicted at around $4.3 billion.

Zacks Rank

HCA Healthcare 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 Release

Of the Medical sector players that have reported fourth-quarter results so far, the bottom lines of UnitedHealth Group Incorporated (UNH - Free Report) and Elevance Health Inc. (ELV - Free Report) beat the Zacks Consensus Estimate.

UnitedHealth Group reported fourth-quarter 2022 adjusted earnings of $5.34 per share, which beat the Zacks Consensus Estimate of $5.17. The bottom line improved from the $4.48 per share reported a year ago. Revenues of UNH were $82.8 billion in the fourth quarter, which climbed from $73.7 billion a year ago. The top line met the consensus mark. The medical care ratio of UnitedHealth Group improved 20 basis points year over year to 82.8% in the quarter under review.

Elevance Health’s fourth-quarter 2022 earnings of $5.23 per share beat the Zacks Consensus Estimate of $5.20 by 0.6%. Additionally, the bottom line advanced 1.8% year over year. ELV’s operating revenues improved 10.1% year over year to $39,667 million in the quarter under review. The top line missed the consensus mark by a whisker. Medical membership of Elevance Health as of Dec 31, 2022, totaled 47.5 million, which rose 4.8% year over year in the fourth quarter. Premiums of $33,646 million rose 9.4% year over year.

An Upcoming Release

Here is a company from the Medical space, which according to our model, has the right combination of elements to beat on earnings this time around:

IDEXX Laboratories, Inc. (IDXX - Free Report) has an Earnings ESP of +0.39% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for IDXX’s fourth-quarter 2022 earnings stands at $1.92 per share, suggesting 1.6% growth from the year-ago quarter’s reported figure.

IDEXX Laboratories’ earnings beat estimates in each of the trailing four quarters, the average surprise being 5.19%.

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