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Why Is HCA Holdings (HCA) Down 3.3% Since the Last Earnings Report?

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It has been about about a month since the last earnings report for HCA Holdings, Inc. (HCA - Free Report) . Shares have lost about 3.3% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 catalysts.

HCA Healthcare Q2 Earnings & Revenues Lag

HCA Healthcare, Inc. reported second-quarter 2017 adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.80.

The earnings miss can be traced back to an increase in expenses, which outpaced revenue growth.

HCA Healthcare posted revenues of $10.73 billion, a tad below the Zacks Consensus Estimate of $10.74 billion. The reported figure was up from 4% from the year-ago quarter.

For the quarter ended Jun 30, 2017, the provision for doubtful accounts increased 18.1% year over year to $1.83 million.

Quarter Details

Adjusted EBITDA totaled $2.090 billion, up 1.9% year over year.

Same facility equivalent admissions increased 1.3% year over year, while same facility admissions increased 0.8%. Same facility revenue per equivalent admission rose 2%.

Salaries and benefits, supplies and other operating expenses increased 4.6% year over year to $8.656 billion.

As of Jun 30, 2017, HCA Healthcare operated 172 hospitals and 119 freestanding surgery centers.

Financial Update

As of Jun 30, 2017, the company had cash and cash equivalents of $705 million, total debt of $31.7 billion and total assets of $34.6 billion.

During the reported quarter, capital expenditures totaled $733 million, excluding acquisitions. Cash flows provided by operating activities totaled $1.404 billion, up 4.1% year over year.

As of Jun 30, 2017, the company’s total debt/adjusted EBITDA was 3.83x compared with 3.82x as of Dec 31, 2016.

During the quarter, the company repurchased 6.4 million shares for $542 million. It had $887 million remaining under its existing repurchase authorization as of Jun 30, 2017.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.

HCA Holdings, Inc. Price and Consensus


HCA Holdings, Inc. Price and Consensus | HCA Holdings, Inc. Quote

VGM Scores

At this time, HCA Holdings' stock has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.

Based on our scores, the stock is primarily suitable for value investors while also being suitable for those looking for growth and to a lesser degree momentum.


The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.

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