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Why Is HCA (HCA) Up 2.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for HCA Healthcare (HCA - Free Report) . Shares have added about 2.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is HCA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
HCA Healthcare's Q4 Earnings Beat on Improved Admissions
HCA Healthcare reported fourth-quarter 2023 adjusted earnings per share (EPS) of $5.90, which beat the Zacks Consensus Estimate by 16.8%. The bottom line improved 27.2% year over year.
Revenues amounted to $17.3 billion, which improved 11.6% year over year in the quarter under review. The top line outpaced the consensus mark by 4.5%.
The strong quarterly results gained from expanding patient volumes and increased surgeries contributed substantially to the top line of HCA Healthcare. However, the upside was partly offset by escalating salaries and benefits expenses.
Quarterly Details
Same-facility equivalent admissions advanced 3.9% year over year in the fourth quarter, while same-facility admissions grew 3.1% year over year. The metrics beat our growth estimates of 3.2% and 2.8%, respectively.
Same-facility revenue per equivalent admission rose 6.9% year over year in the quarter under review and surpassed our growth estimate of 3.3%.
Same-facility inpatient surgeries grew 1% year over year but missed our growth estimate of 1.7%. Same-facility outpatient surgeries inched up 0.7% year over year but lagged our growth estimate of 2.4%. Additionally, same-facility emergency room visits advanced 2.1% year over year in the fourth quarter but missed our growth estimate of 2.8%.
Salaries and benefits, supplies and other operating expenses of $10.1 billion escalated 7.1% year over year and came higher than our estimate of $9.9 billion.
Adjusted EBITDA improved 13.8% year over year to $3.6 billion in the quarter under review.
HCA Healthcare operated 186 hospitals and roughly 2,400 ambulatory sites of care across 20 states and the United Kingdom as of Dec 31, 2023.
Financial Update (as of Dec 31, 2023)
HCA Healthcare exited the fourth quarter with cash and cash equivalents of $935 million, up from the 2022-end level of $908 million. It had a leftover capacity of $6.1 billion under its credit facilities at the fourth-quarter end.
Total assets of $56.2 billion increased from $52.4 billion at 2022-end.
Long-term debt, excluding debt issuance costs and discounts, amounted to $37.2 billion. The figure declined from $37.7 billion at 2022-end.
Capital expenditures were $1.2 billion minus acquisitions during the quarter under review.
Cash Flows
HCA Healthcare generated cash from operations of $9.4 billion in 2023, which improved 10.7% year over year.
Capital Deployment Update
HCA Healthcare bought back shares worth $910 million in the fourth quarter. It had a leftover capacity of $775 million under its buyback authorization as of Dec 31, 2023. Management also sanctioned an additional up to $6 billion increase in its share repurchase program.
The board of directors hiked its quarterly cash dividend to 66 cents per share, which will be paid out on Mar 29, 2024, to its shareholders of record as of Mar 15.
Full-Year Update
In 2023, HCA Healthcare’s adjusted EPS came in at $19.01, surpassing the management guidance range of $17.80-$18.50. The bottom line improved 12.6% from the 2022 figure. Revenues of $65 billion grew 7.9% from the 2022 figure and surpassed company guidance of $63.5 billion-$64.5 billion.
Adjusted EBITDA improved 5% year over year to $12.7 billion in 2023 and surpassed the management view of $12.3-$12.6 billion.
2024 View
Annual revenues are presently estimated to lie between $67.8 billion and $70.3 billion in 2024. The midpoint of the outlook indicates a 6.2% rise from the 2023 reported figure.
Management is currently projecting adjusted EBITDA to be within $12.9-$13.6 billion for 2024. The midpoint of the outlook suggests 3.9% growth from the 2023 figure.
Net income attributable to HCA Healthcare is presently anticipated to lie between $5.2 billion and $5.6 billion. The midpoint of the outlook suggests 3% growth from the 2023 figure.
EPS is currently forecasted to be in the $19.70-$21.20 band for 2024. The midpoint of the guidance implies a 7.6% rise from the 2023 figure.
Capital expenditures, excluding acquisitions, are expected to be around $5.1-$5.3 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, HCA has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise HCA has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is HCA (HCA) Up 2.4% Since Last Earnings Report?
A month has gone by since the last earnings report for HCA Healthcare (HCA - Free Report) . Shares have added about 2.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is HCA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
HCA Healthcare's Q4 Earnings Beat on Improved Admissions
HCA Healthcare reported fourth-quarter 2023 adjusted earnings per share (EPS) of $5.90, which beat the Zacks Consensus Estimate by 16.8%. The bottom line improved 27.2% year over year.
Revenues amounted to $17.3 billion, which improved 11.6% year over year in the quarter under review. The top line outpaced the consensus mark by 4.5%.
The strong quarterly results gained from expanding patient volumes and increased surgeries contributed substantially to the top line of HCA Healthcare. However, the upside was partly offset by escalating salaries and benefits expenses.
Quarterly Details
Same-facility equivalent admissions advanced 3.9% year over year in the fourth quarter, while same-facility admissions grew 3.1% year over year. The metrics beat our growth estimates of 3.2% and 2.8%, respectively.
Same-facility revenue per equivalent admission rose 6.9% year over year in the quarter under review and surpassed our growth estimate of 3.3%.
Same-facility inpatient surgeries grew 1% year over year but missed our growth estimate of 1.7%. Same-facility outpatient surgeries inched up 0.7% year over year but lagged our growth estimate of 2.4%. Additionally, same-facility emergency room visits advanced 2.1% year over year in the fourth quarter but missed our growth estimate of 2.8%.
Salaries and benefits, supplies and other operating expenses of $10.1 billion escalated 7.1% year over year and came higher than our estimate of $9.9 billion.
Adjusted EBITDA improved 13.8% year over year to $3.6 billion in the quarter under review.
HCA Healthcare operated 186 hospitals and roughly 2,400 ambulatory sites of care across 20 states and the United Kingdom as of Dec 31, 2023.
Financial Update (as of Dec 31, 2023)
HCA Healthcare exited the fourth quarter with cash and cash equivalents of $935 million, up from the 2022-end level of $908 million. It had a leftover capacity of $6.1 billion under its credit facilities at the fourth-quarter end.
Total assets of $56.2 billion increased from $52.4 billion at 2022-end.
Long-term debt, excluding debt issuance costs and discounts, amounted to $37.2 billion. The figure declined from $37.7 billion at 2022-end.
Capital expenditures were $1.2 billion minus acquisitions during the quarter under review.
Cash Flows
HCA Healthcare generated cash from operations of $9.4 billion in 2023, which improved 10.7% year over year.
Capital Deployment Update
HCA Healthcare bought back shares worth $910 million in the fourth quarter. It had a leftover capacity of $775 million under its buyback authorization as of Dec 31, 2023. Management also sanctioned an additional up to $6 billion increase in its share repurchase program.
The board of directors hiked its quarterly cash dividend to 66 cents per share, which will be paid out on Mar 29, 2024, to its shareholders of record as of Mar 15.
Full-Year Update
In 2023, HCA Healthcare’s adjusted EPS came in at $19.01, surpassing the management guidance range of $17.80-$18.50. The bottom line improved 12.6% from the 2022 figure. Revenues of $65 billion grew 7.9% from the 2022 figure and surpassed company guidance of $63.5 billion-$64.5 billion.
Adjusted EBITDA improved 5% year over year to $12.7 billion in 2023 and surpassed the management view of $12.3-$12.6 billion.
2024 View
Annual revenues are presently estimated to lie between $67.8 billion and $70.3 billion in 2024. The midpoint of the outlook indicates a 6.2% rise from the 2023 reported figure.
Management is currently projecting adjusted EBITDA to be within $12.9-$13.6 billion for 2024. The midpoint of the outlook suggests 3.9% growth from the 2023 figure.
Net income attributable to HCA Healthcare is presently anticipated to lie between $5.2 billion and $5.6 billion. The midpoint of the outlook suggests 3% growth from the 2023 figure.
EPS is currently forecasted to be in the $19.70-$21.20 band for 2024. The midpoint of the guidance implies a 7.6% rise from the 2023 figure.
Capital expenditures, excluding acquisitions, are expected to be around $5.1-$5.3 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, HCA has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise HCA has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.