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Universal Health's (UHS) Q2 Earnings Top Estimates, Rise Y/Y

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Universal Health Services Inc. (UHS - Free Report) delivered second-quarter 2019 adjusted earnings of $2.76 per share, beating the Zacks Consensus Estimate by 10.8%. Moreover, the bottom line improved 11.7% year over year and this upside is mainly attributable to rising revenues.

Further, net revenues increased 6.5% year over year to $2.8 billion and also exceeded the Zacks Consensus Estimate by 1.6%, backed by higher admissions and patient days.

Total operating expenses of $2.5 billion at the end of the second quarter increased 6.5% year over year, mainly due to salaries, wages and benefits along with other operating expense plus supplies expenses.

Segmental Update

Acute Care Hospitals:

Adjusted admissions and adjusted patient days rose 5% and 5.2%, respectively, from the prior-year quarter. Net revenues (on a same-facility basis) climbed 9% in the second quarter, majorly aided by higher admissions and patient days.

Behavioral Hospitals:

On same-facility basis, adjusted admissions inched up 0.5% while adjusted patient days dipped 0.3%, both on a year-over-year basis. Net revenues were up 2.7% during the quarter under review on same-facility basis owing to higher admissions.

Financial Update

As of Jun 30, 2019, the company had cash and cash equivalents of nearly $61.3 million, up 41.7% from the level at 2018 end.

Total assets were $11.8 billion as of Jun 30, 2019, up 4.3% from the 2018-end figure.

The company’s long-term debt came in at $4 billion, up 3.1% from the level at 2018 end.

For the first six months of 2019, net cash provided by operating activities totaled $624 billion, up 2.8% year over year.

Buyback Program

In the second quarter, the company bought back 2.72 million shares worth $339.2 million.

In July 2019, the company’s board of directors increased its share buyback plan by $1 billion.

The company’s cash dividend was hiked from 10 cents to 20 cents per share in July, 2019. This meatier dividend will be paid out on Sep 16, 2019 to shareholders of record on Sep 3, 2019.

Zacks Rank

Universal Health currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Releases From the Medical Sector

Among other players from the medical sector having reported second-quarter earnings so far, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) , Anthem Inc. (ANTM - Free Report) and Centene Corporation (CNC - Free Report) outpaced the respective Zacks Consensus Estimate.

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