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Universal Health (UHS) Beats on Q4 Earnings, Gives '17 View
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Headquartered in King of Prussia, PA, Universal Health Services Inc. (UHS - Free Report) reported fourth-quarter 2016 adjusted earnings of $1.80 per share, a penny ahead of the Zacks Consensus Estimate. Earnings also improved 5.3% on a year-over-year basis.
The year-over-year improvement was driven by almost 6.9% increase in revenues to approximately $2.48 billion.
Net revenue increased 6.9% year over year to $2.48 billion. Net revenue from acute care services climbed 9.3% in the fourth quarter. Notably, adjusted admissions were up 4.7% and adjusted patient days rose 3.2%, both on a year-over-year basis. Net revenue per adjusted admission grew 2.6%, while net revenue per adjusted patient day was up 4.2%, both on a year-over-year basis.
Universal Health has been a pioneer in providing care to deprived patients at low costs. Even in this quarter, the company provided ‘charity care and uninsured discounts’ of approximately $399 million compared with $332 million in the year-ago quarter.
Coming to behavioral hospitals, same facility revenues improved 2.2% in the quarter. Adjusted admissions increased 2.1% while adjusted patient days climbed 1.4% compared to the same quarter last year. Net revenue per adjusted admission decreased 0.1%, while net revenue per adjusted patient day was up 0.5% on a year-over-year basis.
Provision for doubtful accounts decreased 18% year over year to $162.8 million. Operating charges of $2.2 billion were up 8.4% year over year owing to an increase in salaries, wages and benefits, other operating expenses, supply expenses, depreciation and amortization.
As of Dec 31, 2016, the company’s debt-to-capital ratio was 47.7%, up from 44.7% as of Dec 31, 2015. Cash flow from operations for the year 2016 was $1.29 billion compared with $1.02 billion in 2015.
At the end of the year, the company owned and leased 26 acute care hospitals, up 8.3% year over year. It also had 214 behavioral health hospitals at year-end 2016, up 0.5% year over year.
Buyback Program
In Feb 2016, Universal Health announced a new share repurchase program worth $400 million, which raised the total authorization to $800 million. During the fourth quarter, the company bought back shares worth $51.8 million.
2017 Guidance
For 2017, the company expects earnings in the band of $7.70–$8.20 per share. This translates to year-over-year growth of 8.6% (calculated at the mid- point).
Revenues are expected to lie in the range of $10.62–$10.76 billion, which translates into year over year growth rate of 9.4%.
Adjusted EBIDTA will likely be in the band of $1.746–$1.821 billion.
The company is planning to spend $475–$500 million on capital expenditures.
Universal Health Services, Inc. Price, Consensus and EPS Surprise
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Universal Health (UHS) Beats on Q4 Earnings, Gives '17 View
Headquartered in King of Prussia, PA, Universal Health Services Inc. (UHS - Free Report) reported fourth-quarter 2016 adjusted earnings of $1.80 per share, a penny ahead of the Zacks Consensus Estimate. Earnings also improved 5.3% on a year-over-year basis.
The year-over-year improvement was driven by almost 6.9% increase in revenues to approximately $2.48 billion.
Business Highlights
Net revenue increased 6.9% year over year to $2.48 billion. Net revenue from acute care services climbed 9.3% in the fourth quarter. Notably, adjusted admissions were up 4.7% and adjusted patient days rose 3.2%, both on a year-over-year basis. Net revenue per adjusted admission grew 2.6%, while net revenue per adjusted patient day was up 4.2%, both on a year-over-year basis.
Universal Health has been a pioneer in providing care to deprived patients at low costs. Even in this quarter, the company provided ‘charity care and uninsured discounts’ of approximately $399 million compared with $332 million in the year-ago quarter.
Coming to behavioral hospitals, same facility revenues improved 2.2% in the quarter. Adjusted admissions increased 2.1% while adjusted patient days climbed 1.4% compared to the same quarter last year. Net revenue per adjusted admission decreased 0.1%, while net revenue per adjusted patient day was up 0.5% on a year-over-year basis.
Provision for doubtful accounts decreased 18% year over year to $162.8 million. Operating charges of $2.2 billion were up 8.4% year over year owing to an increase in salaries, wages and benefits, other operating expenses, supply expenses, depreciation and amortization.
As of Dec 31, 2016, the company’s debt-to-capital ratio was 47.7%, up from 44.7% as of Dec 31, 2015. Cash flow from operations for the year 2016 was $1.29 billion compared with $1.02 billion in 2015.
At the end of the year, the company owned and leased 26 acute care hospitals, up 8.3% year over year. It also had 214 behavioral health hospitals at year-end 2016, up 0.5% year over year.
Buyback Program
In Feb 2016, Universal Health announced a new share repurchase program worth $400 million, which raised the total authorization to $800 million. During the fourth quarter, the company bought back shares worth $51.8 million.
2017 Guidance
For 2017, the company expects earnings in the band of $7.70–$8.20 per share. This translates to year-over-year growth of 8.6% (calculated at the mid- point).
Revenues are expected to lie in the range of $10.62–$10.76 billion, which translates into year over year growth rate of 9.4%.
Adjusted EBIDTA will likely be in the band of $1.746–$1.821 billion.
The company is planning to spend $475–$500 million on capital expenditures.
Universal Health Services, Inc. Price, Consensus and EPS Surprise
Universal Health Services, Inc. Price, Consensus and EPS Surprise | Universal Health Services, Inc. Quote
Zacks Rank and Performance of Other Hospital Stocks
Universal Health carries a Zacks Rank #3 (Hold). Other hospital companies HCA Holdings, Inc. (HCA - Free Report) , LifePoint Health, Inc. and Community Health Systems, Inc. (CYH - Free Report) beat the Zacks Consensus Estimate by 6.18%, 1.87% and 283.33%, respectively, in the fourth quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with
jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>