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Universal Health Services Inc. (UHS - Free Report) delivered fourth-quarter 2019 adjusted earnings of $2.79 per share, beating the Zacks Consensus Estimate by 6.9%. Moreover, the bottom line increased 17.7% year over year on the back of higher revenues.
In the quarter under review, revenues increased 5.1% year over year to $2.9 billion and also exceeded the Zacks Consensus Estimate by 0.3%, backed by higher admissions and patient days.
Total operating expenses of $2.5 billion at the end of the fourth quarter increased 2.4% year over year due to higher salaries, wages and benefits, supplies expense, and depreciation and amortization expenses.
Universal Health Services, Inc. Price, Consensus and EPS Surprise
Adjusted admissions and adjusted patient days rose 2.1% and 6%, respectively, from the prior-year quarter. Net revenues (on same-facility basis) climbed 7.9% in the fourth quarter, majorly aided by higher admissions and patient days.
Behavioral Hospitals:
On same-facility basis, adjusted admissions inched up 0.8% while adjusted patient days were up 0.9%, both on a year-over-year basis. Net revenues too were up 4.5% year over year on same-facility basis.
Financial Update
As of Dec 31, 2019, the company had cash and cash equivalents of $61.3 million, down 41.8% from the level at 2018 end.
Total assets were $11.6 billion as of Dec 31, 2019, up 3.6% from the 2018-end figure.
The company’s long-term debt came in at $3.9 billion, down 1% from the level at 2018 end.
For 2019, net cash provided by operating activities came in at $1.4 billion, up 12.8% year over year. This was on the back of improvement in net income plus/minus depreciation and amortization expense, stock-based compensation expense, provision for asset impairment and net gains on sale of assets and costs related to extinguishment of debt, favorable change in accrued and deferred income taxes as well as net favorable changes.
Buyback Program
In the fourth quarter, the company bought back shares worth $181.2 million.
In July 2019, the company’s board of directors increased its share buyback plan by $1 billion.
Full-Year Highlights
For 2019, the company’s net income came in at $9.13 per share, up 9.9% year over year.
Net revenues for 2019 were up 5.6% year over year to $11.4 billion.
2020 Guidance
Following fourth-quarter results, the company gave its 2020 outlook.
Net revenues for the current year are anticipated between $11.96 billion and $12.11 billion.
Adjusted EPS per share is expected in the band of $10.30-$11. Management projects capital expenditures between $775 million and $825 million.
Among other medical sector players that already reported fourth-quarter earnings, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) beat estimates while that of Anthem Inc. missed the consensus mark.
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Universal Health's (UHS) Q4 Earnings Surpass, Improve Y/Y
Universal Health Services Inc. (UHS - Free Report) delivered fourth-quarter 2019 adjusted earnings of $2.79 per share, beating the Zacks Consensus Estimate by 6.9%. Moreover, the bottom line increased 17.7% year over year on the back of higher revenues.
In the quarter under review, revenues increased 5.1% year over year to $2.9 billion and also exceeded the Zacks Consensus Estimate by 0.3%, backed by higher admissions and patient days.
Total operating expenses of $2.5 billion at the end of the fourth quarter increased 2.4% year over year due to higher salaries, wages and benefits, supplies expense, and depreciation and amortization expenses.
Universal Health Services, Inc. Price, Consensus and EPS Surprise
Universal Health Services, Inc. price-consensus-eps-surprise-chart | Universal Health Services, Inc. Quote
Segmental Update
Acute Care Hospitals:
Adjusted admissions and adjusted patient days rose 2.1% and 6%, respectively, from the prior-year quarter. Net revenues (on same-facility basis) climbed 7.9% in the fourth quarter, majorly aided by higher admissions and patient days.
Behavioral Hospitals:
On same-facility basis, adjusted admissions inched up 0.8% while adjusted patient days were up 0.9%, both on a year-over-year basis. Net revenues too were up 4.5% year over year on same-facility basis.
Financial Update
As of Dec 31, 2019, the company had cash and cash equivalents of $61.3 million, down 41.8% from the level at 2018 end.
Total assets were $11.6 billion as of Dec 31, 2019, up 3.6% from the 2018-end figure.
The company’s long-term debt came in at $3.9 billion, down 1% from the level at 2018 end.
For 2019, net cash provided by operating activities came in at $1.4 billion, up 12.8% year over year. This was on the back of improvement in net income plus/minus depreciation and amortization expense, stock-based compensation expense, provision for asset impairment and net gains on sale of assets and costs related to extinguishment of debt, favorable change in accrued and deferred income taxes as well as net favorable changes.
Buyback Program
In the fourth quarter, the company bought back shares worth $181.2 million.
In July 2019, the company’s board of directors increased its share buyback plan by $1 billion.
Full-Year Highlights
For 2019, the company’s net income came in at $9.13 per share, up 9.9% year over year.
Net revenues for 2019 were up 5.6% year over year to $11.4 billion.
2020 Guidance
Following fourth-quarter results, the company gave its 2020 outlook.
Net revenues for the current year are anticipated between $11.96 billion and $12.11 billion.
Adjusted EPS per share is expected in the band of $10.30-$11. Management projects capital expenditures between $775 million and $825 million.
Zacks Rank
Universal Health currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Releases From the Medical Sector
Among other medical sector players that already reported fourth-quarter earnings, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) beat estimates while that of Anthem Inc. missed the consensus mark.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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