Shares of Universal Health Realty Income Trust (UHT Quick QuoteUHT - Free Report) have gained 0.4% since the company reported its earnings for the quarter ended Sept. 30, 2026. This compares to the S&P 500 Index’s 0.02% decline over the same time frame. Over the past month, the stock gained 3.9% against the S&P 500’s 0.2% decline.

Universal Health Realty’s Earnings Snapshot

Universal Health Realty reported third-quarter 2026 net income of $4.9 million, or 35 cents per diluted share, compared with $4 million, or 29 cents per share, in the year-ago quarter. Total revenues were $25.3 million, largely unchanged year over year.

Lease revenues from Universal Health Services (“UHS”) facilities were $8.4 million, while lease revenues from non-related parties totaled $14.9 million compared with $8.4 million and $14.8 million, respectively, in the prior-year quarter.

UHT did not provide separate operating segment results.

Factors Driving UHT’s Earnings

The improvement in quarterly profitability primarily reflected lower depreciation expenses and reduced interest costs, partially offset by the absence of a nonrecurring settlement benefit recorded in the prior-year period.

A $0.9 million favorable impact resulted primarily from nonrecurring depreciation expenses recognized in the third quarter of 2025. Lower interest expenses contributed another $0.3 million, reflecting a decline in the average effective borrowing rate, partially offset by higher average borrowings under UHT’s credit agreement.

However, the absence of a one-time settlement and release agreement associated with a medical office building (MOB), executed during the third quarter of 2025, reduced the year-over-year earnings benefit.

Depreciation and amortization expenses declined 10.7% to $7.1 million from $7.9 million, while net interest expenses decreased 5.9% to $4.5 million from $4.8 million. Other operating expenses increased 3.7% to $7.9 million from $7.6 million.

Advisory fees paid to UHS increased 3.4% to $1.5 million from $1.4 million in the year-ago quarter. Meanwhile, equity in income from unconsolidated limited liability companies rose 13.5% to $0.5 million from $0.4 million, providing some support to quarterly profitability.

Universal Health Realty’s FFO

Funds from operations (FFO), a key performance metric for real estate investment trusts, totaled $12.3 million compared with $12.2 million in the year-ago quarter. FFO per diluted share remained unchanged at 88 cents.

For the first nine months of 2026, net income increased 19.3% to $15.9 million, or $1.14 per share, from $13.3 million, or 96 cents per share, in the comparable period of 2025.

Excluding a land-sale gain recorded during the second quarter, adjusted net income was $15.1 million, or $1.09 per diluted share. Nine-month FFO increased 3.1% to $37.1 million, or $2.67 per diluted share, from $35.9 million, or $2.59 per diluted share, a year earlier.

UHT’s Liquidity and Dividends

As of Sept. 30, 2026, Universal Health Realty had $97.3 million in available borrowing capacity under its $475 million credit agreement, with outstanding borrowings of $377.7 million. The agreement matures on Sept. 30, 2028, with options for two additional six-month extensions.

Cash and cash equivalents stood at $6.5 million as of Sept. 30, 2026, compared with $6.7 million as of Dec. 31, 2025. Total assets were $573 million compared with $564.9 million at year-end 2025.

UHT declared a third-quarter dividend of 75 cents per share, totaling $10.4 million, which was paid on Sept. 30, 2026.

Universal Health Realty’s Development Pipeline

Construction of Miller Medical Plaza, an 80,000-square-foot MOB in Palm Beach Gardens, FL, remains on track for completion in December 2026.

The project carries an estimated development cost of $34 million. A UHS subsidiary has executed a 10-year master flex lease covering approximately 75% of the building's rentable space, subject to reductions as third-party leases are executed.

The property is located on the campus of Alan B. Miller Medical Center, which opened in May 2026.

UHT’s Other Developments

In October 2026, Universal Health Realty sold a land parcel in Chicago for approximately $1.96 million in net cash proceeds. The transaction is expected to generate a gain of approximately $1.90 million in the fourth quarter of 2026.

UHT also completed a separate Chicago land sale in June 2026, generating approximately $0.75 million in net proceeds and a corresponding gain of approximately $0.72 million, recognized during the second quarter.