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HCA Healthcare's (HCA) Q3 Earnings Miss on High Expense Level
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HCA Healthcare, Inc. (HCA - Free Report) reported third-quarter 2023 adjusted earnings per share (EPS) of $3.91, which missed the Zacks Consensus Estimate by 1.5%. The bottom line dipped 0.5% year over year.
Revenues amounted to $16.2 billion, which improved 8.3% year over year in the quarter under review. The top line outpaced the consensus mark by 2.8%.
The quarterly results suffered a blow due to an elevated expense level and the soft performance of the Valesco physician staffing joint venture. Nevertheless, the downside was partly offset by growing patient admissions and a higher number of surgeries.
HCA Healthcare, Inc. Price, Consensus and EPS Surprise
Same-facility equivalent admissions advanced 4.1% year over year in the third quarter, while same-facility admissions grew 3.4% year over year. The metrics beat our growth estimates of 1.5% and 2%, respectively.
Same-facility revenue per equivalent admission rose 3.6% year over year in the quarter under review but fell short of our growth estimate of 4%.
Same-facility inpatient surgeries grew 1.6% year over year but missed our growth estimate of 2.7%. Same-facility outpatient surgeries inched up 0.9% year over year but lagged our growth estimate of 2.7%. Additionally, same-facility emergency room visits advanced 3.5% year over year in the third quarter but missed our growth estimate of 4.5%.
Salaries and benefits, supplies and other operating expenses of $13.4 billion escalated 10.5% year over year and came higher than our estimate of $12.6 billion.
Adjusted EBITDA dipped 0.8% year over year to $2.9 billion in the quarter under review.
HCA Healthcare operated 183 hospitals and roughly 2,300 ambulatory sites of care across 20 states and the United Kingdom as of Sep 30, 2023.
Financial Update (as of Sep 30, 2023)
HCA Healthcare exited the third quarter with cash and cash equivalents of $891 million, which slid 1.9% from the 2022-end level. It had a leftover capacity of $6.5 billion under its credit facilities at the third-quarter end.
Total assets of $54.6 billion increased 4.1% from the figure at 2022 end.
Long-term debt, excluding debt issuance costs and discounts, amounted to $36.8 billion. The figure declined 2.4% from the figure as of Dec 31, 2022.
Capital expenditures were $1.1 billion minus acquisitions during the quarter under review.
Decline in Cash Flows
HCA Healthcare generated cash from operations of $2.5 billion in the third quarter, which dropped 17.9% year over year.
Capital Deployment Update
HCA bought back shares worth $1.1 billion in the third quarter. It had a leftover capacity of $1.7 billion under its buyback authorization as of Sep 30, 2023.
The Board of Directors approved a quarterly cash dividend of 60 cents per share, which will be paid out on Dec 28, 2023, to its shareholders of record as of Dec 14.
2023 View
Annual revenues are presently estimated to lie between $63.5 billion and $64.5 billion compared with the previous guidance of $63.25-$64.75 billion. The midpoint of the revised outlook indicates a 6.3% rise from the 2022 reported figure.
Management currently projects adjusted EBITDA to be within $12.3-$12.6 billion for 2023, down from the prior view of $12.3-$12.8 billion. The midpoint of the updated outlook suggests 3.2% growth from the 2022 figure.
Net income attributable to HCA Healthcare is presently anticipated to lie between $4.940 billion and $5.130 billion compared with the previous outlook of $4.900-$5.255 billion.
EPS is currently forecasted to be in the $17.80-$18.50 band compared with the previous view of $17.70-$18.90. The midpoint of the revised guidance implies a 7.5% rise from the 2022 figure.
Earlier, capital expenditures, excluding acquisitions, were expected to be around $4.7 billion.
Of the Medical sector players that have reported third-quarter 2023 results so far, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) , Intuitive Surgical, Inc. (ISRG - Free Report) and Abbott Laboratories (ABT - Free Report) beat the respective Zacks Consensus Estimate.
UnitedHealth Group reported third-quarter 2023 adjusted EPS of $6.56, which outpaced the Zacks Consensus Estimate by 3.6%. The bottom line advanced 13.3% year over year. Revenues improved 14.2% year over year to $92.4 billion in the quarter under review. The top line surpassed the consensus mark by 1%.
UNH reported operating earnings of $8.5 billion, which climbed 13.3% year over year in the quarter under review. Revenues from the health benefits business of UnitedHealth Group, UnitedHealthcare, rose 13% year over year to $69.9 billion on the back of a growing membership base. As of Sep 30, 2023, the unit catered to 52.8 million people, which rose 2.8% year over year.
Intuitive Surgical reported third-quarter 2023 adjusted EPS of $1.46, which beat the Zacks Consensus Estimate of EPS of $1.41 by 3.5%. The bottom line improved 22.7% year over year. ISRG reported revenues of $1.74 billion, up 11.5% from the prior-year quarter’s recorded number. The top line, however, missed the Zacks Consensus Estimate by 1.7%. Adjusted operating income totaled $623.7 million, up 12.5% year over year. As a percentage of revenues, the operating margin was 35.8%, up 20 bps sequentially. Revenues from the Instruments & Accessories segment totaled $1.07 billion, indicating a year-over-year improvement of 23%.
Abbott Laboratories reported third-quarter 2023 adjusted earnings of $1.14 per share, which topped the Zacks Consensus Estimate by 3.6%. However, the adjusted figure declined from the prior-year quarter’s levels by 0.9%. Third-quarter worldwide sales of $10.14 billion were down 2.6% year over year on a reported basis.
The top line exceeded the consensus estimate by 3.6%. ABT reported an adjusted operating profit of $2.14 billion in the quarter under review, down 5.5% year over year. Also, the adjusted operating margin contracted 66 bps to 21.1%. In the third quarter, the Medical Devices segment’s sales rose 16.6% year over year on a reported basis (up 14.7% on an organic basis) to $4.25 billion.
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HCA Healthcare's (HCA) Q3 Earnings Miss on High Expense Level
HCA Healthcare, Inc. (HCA - Free Report) reported third-quarter 2023 adjusted earnings per share (EPS) of $3.91, which missed the Zacks Consensus Estimate by 1.5%. The bottom line dipped 0.5% year over year.
Revenues amounted to $16.2 billion, which improved 8.3% year over year in the quarter under review. The top line outpaced the consensus mark by 2.8%.
The quarterly results suffered a blow due to an elevated expense level and the soft performance of the Valesco physician staffing joint venture. Nevertheless, the downside was partly offset by growing patient admissions and a higher number of surgeries.
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 4.1% year over year in the third quarter, while same-facility admissions grew 3.4% year over year. The metrics beat our growth estimates of 1.5% and 2%, respectively.
Same-facility revenue per equivalent admission rose 3.6% year over year in the quarter under review but fell short of our growth estimate of 4%.
Same-facility inpatient surgeries grew 1.6% year over year but missed our growth estimate of 2.7%. Same-facility outpatient surgeries inched up 0.9% year over year but lagged our growth estimate of 2.7%. Additionally, same-facility emergency room visits advanced 3.5% year over year in the third quarter but missed our growth estimate of 4.5%.
Salaries and benefits, supplies and other operating expenses of $13.4 billion escalated 10.5% year over year and came higher than our estimate of $12.6 billion.
Adjusted EBITDA dipped 0.8% year over year to $2.9 billion in the quarter under review.
HCA Healthcare operated 183 hospitals and roughly 2,300 ambulatory sites of care across 20 states and the United Kingdom as of Sep 30, 2023.
Financial Update (as of Sep 30, 2023)
HCA Healthcare exited the third quarter with cash and cash equivalents of $891 million, which slid 1.9% from the 2022-end level. It had a leftover capacity of $6.5 billion under its credit facilities at the third-quarter end.
Total assets of $54.6 billion increased 4.1% from the figure at 2022 end.
Long-term debt, excluding debt issuance costs and discounts, amounted to $36.8 billion. The figure declined 2.4% from the figure as of Dec 31, 2022.
Capital expenditures were $1.1 billion minus acquisitions during the quarter under review.
Decline in Cash Flows
HCA Healthcare generated cash from operations of $2.5 billion in the third quarter, which dropped 17.9% year over year.
Capital Deployment Update
HCA bought back shares worth $1.1 billion in the third quarter. It had a leftover capacity of $1.7 billion under its buyback authorization as of Sep 30, 2023.
The Board of Directors approved a quarterly cash dividend of 60 cents per share, which will be paid out on Dec 28, 2023, to its shareholders of record as of Dec 14.
2023 View
Annual revenues are presently estimated to lie between $63.5 billion and $64.5 billion compared with the previous guidance of $63.25-$64.75 billion. The midpoint of the revised outlook indicates a 6.3% rise from the 2022 reported figure.
Management currently projects adjusted EBITDA to be within $12.3-$12.6 billion for 2023, down from the prior view of $12.3-$12.8 billion. The midpoint of the updated outlook suggests 3.2% growth from the 2022 figure.
Net income attributable to HCA Healthcare is presently anticipated to lie between $4.940 billion and $5.130 billion compared with the previous outlook of $4.900-$5.255 billion.
EPS is currently forecasted to be in the $17.80-$18.50 band compared with the previous view of $17.70-$18.90. The midpoint of the revised guidance implies a 7.5% rise from the 2022 figure.
Earlier, capital expenditures, excluding acquisitions, were expected to be around $4.7 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 Releases
Of the Medical sector players that have reported third-quarter 2023 results so far, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) , Intuitive Surgical, Inc. (ISRG - Free Report) and Abbott Laboratories (ABT - Free Report) beat the respective Zacks Consensus Estimate.
UnitedHealth Group reported third-quarter 2023 adjusted EPS of $6.56, which outpaced the Zacks Consensus Estimate by 3.6%. The bottom line advanced 13.3% year over year. Revenues improved 14.2% year over year to $92.4 billion in the quarter under review. The top line surpassed the consensus mark by 1%.
UNH reported operating earnings of $8.5 billion, which climbed 13.3% year over year in the quarter under review. Revenues from the health benefits business of UnitedHealth Group, UnitedHealthcare, rose 13% year over year to $69.9 billion on the back of a growing membership base. As of Sep 30, 2023, the unit catered to 52.8 million people, which rose 2.8% year over year.
Intuitive Surgical reported third-quarter 2023 adjusted EPS of $1.46, which beat the Zacks Consensus Estimate of EPS of $1.41 by 3.5%. The bottom line improved 22.7% year over year. ISRG reported revenues of $1.74 billion, up 11.5% from the prior-year quarter’s recorded number. The top line, however, missed the Zacks Consensus Estimate by 1.7%. Adjusted operating income totaled $623.7 million, up 12.5% year over year. As a percentage of revenues, the operating margin was 35.8%, up 20 bps sequentially. Revenues from the Instruments & Accessories segment totaled $1.07 billion, indicating a year-over-year improvement of 23%.
Abbott Laboratories reported third-quarter 2023 adjusted earnings of $1.14 per share, which topped the Zacks Consensus Estimate by 3.6%. However, the adjusted figure declined from the prior-year quarter’s levels by 0.9%. Third-quarter worldwide sales of $10.14 billion were down 2.6% year over year on a reported basis.
The top line exceeded the consensus estimate by 3.6%. ABT reported an adjusted operating profit of $2.14 billion in the quarter under review, down 5.5% year over year. Also, the adjusted operating margin contracted 66 bps to 21.1%. In the third quarter, the Medical Devices segment’s sales rose 16.6% year over year on a reported basis (up 14.7% on an organic basis) to $4.25 billion.